Comprehensive Annual Financial Report Fiscal Year Ended ......Subsequently, in November 2017, Springfield voters re-authorized that levy for another five years at an increased rate

Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2018

City of Springfield, Oregon

springfield-or.gov

CITY OF SPRINGFIELD, OREGON

COMPREHENSIVE ANNUAL FINANCIAL REPORT

Fiscal Year Ended June 30, 2018

Prepared by:

Finance Department

Accounting Division



Year Ended June 30, 2018

TABLE OF CONTENTS

Page INTRODUCTORY SECTION Letter of Transmittal 11-25 Organization Chart 27 Principal City Officials 28 Certificate of Achievement for Excellence in Financial Reporting 29 FINANCIAL SECTION Independent Auditor’s Report 35-37 Management’s Discussion and Analysis 41-54 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position 57 Statement of Activities 58 Fund Financial Statements: Balance Sheet – Governmental Funds 59 Statement of Revenues, Expenditures and Changes in Fund Balances –

Governmental Funds 60 Reconciliation of the Statement of Revenues, Expenditures and Changes in

Fund Balances of Governmental Funds to the Statement of Activities 61 Statement of Fund Net Position – Proprietary Funds 62 Statement of Revenues, Expenses and Changes in Fund Net Position –

Proprietary Funds 63 Statement of Cash Flows – Proprietary Funds 64 Statement of Fiduciary Net Position – Agency Fund 65 Notes to Basic Financial Statements 66-114 Required Supplementary Information:

Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual:

General Fund 117 Street Fund 118 Police Local Option Levy Fund 119 Required Supplementary Information Schedules for OPEB, CRP, and OPERS 120-124




Other Supplementary Information: Non-major Governmental Funds Combining Statements: Combining Balance Sheet – Nonmajor Governmental Funds 129 Combining Statement of Revenues, Expenditures and Changes in Fund

Balance – Nonmajor Governmental Funds 130 Special Revenue Funds: Combining Balance Sheet – Nonmajor Special Revenue Funds 133 Combining Statement of Revenues, Expenditures and Changes in Fund

Balances – Nonmajor Special Revenue Funds 134 Schedules of Revenues, Expenditures and Changes in Fund Balance – Budget

and Actual: Special Revenue Fund 135 Transient Room Tax Fund 136 Community Development Fund 137 Building Code Fund 138 SEDA Glenwood General Fund 139 SEDA Downtown General Fund 140 Fire Local Option Levy Fund 141 Debt Service Funds: Combining Balance Sheet – Nonmajor Debt Service Funds 145 Combining Statement of Revenues, Expenditures and Changes in Fund

Balances – Nonmajor Debt Service Funds 146 Schedules of Revenues, Expenditures and Changes in Fund Balance – Budget

and Actual: General Obligation Debt Service Fund 147 Bancroft Redemption Fund 148 Capital Projects Funds:

Combining Balance Sheet – Nonmajor Capital Project Funds 151 Combining Statement of Revenues, Expenditures and Changes in Fund

Balances – Nonmajor Capital Project Funds 152 Schedules of Revenues, Expenditures and Changes in Fund Balance – Budget

and Actual: Development Assessments Capital Projects Fund 153 Development Capital Projects Fund 154 SEDA Glenwood Capital Projects Fund 155 Street Capital Projects Fund 156




Enterprise Funds: Schedules of Revenues, Expenses and Changes in Fund Net Position – Budget

and Actual: Sewer Fund 159 Storm Drainage Fund 160 Ambulance Fund 161 Booth Kelly Fund 162 Internal Service Funds: Combining Statement of Fund Net Position – Internal Service Funds 165 Combining Statement of Revenues, Expenses, and Changes in Fund Net

Position – Internal Service Funds 166 Combining Statement of Cash Flows – Internal Service Funds 167 Schedule of Revenues, Expenses and Changes in Fund Net Position – Budget

and Actual: Vehicle and Equipment Fund 168 Insurance Fund 169 SDC Administration Fund 170 Fiduciary Fund: Statement of Changes in Assets and Liabilities – Agency Fund 173 STATISTICAL SECTION 175 Financial Trend Information Net position by component 179 Changes in net position, last ten fiscal years 180-181 Fund balances, governmental funds, last ten fiscal years 182 Changes in fund balances, governmental funds, last ten fiscal years 183 Revenue Capacity Information Assessed value and actual value of taxable property, last ten fiscal years 187 Direct and overlapping property tax rates, last ten fiscal years 188 Principal property tax payers, current year and nine years ago 189 Property tax levies and collections, last ten fiscal years 190 Debt Capacity Information Ratios of outstanding debt by type, last ten fiscal years 193 Ratios of general bonded debt outstanding, last ten fiscal years 194 Direct and overlapping governmental activities debt 195 Legal debt margin information, last ten fiscal years 196 Pledged revenue coverage, last ten fiscal years 197




Demographic and Economic Information Demographic and economic statistics, last ten calendar years 201 Principal employers, current year and nine years ago 202 Operating Information Full-time equivalent city government employees by function/program, last ten

fiscal years 205 Operating indicators by function/program, last ten fiscal years 206 Capital asset statistics by function/program, last ten fiscal years 207 COMPLIANCE SECTION Audit Comments: Independent Auditor’s Report Required by Oregon State Regulators 213-214

Introductory Section

CITY OF SPRINGFIELD, OREGON

FINANCE DEPARTMENT ACCOUNTING / REPORTING ACCOUNTS RECEIVABLE / PAYABLE ASSESSMENTS BUDGETING / TREASURY PAYROLL PURCHASING

225 FIFTH STREET SPRINGFIELD, OR 97477

(541) 726-3705 FAX (541) 726-3782

www.ci.springfield.or.us

January 15, 2019 To the Citizens of Springfield, Oregon: Local ordinances and state statutes require that the City of Springfield issue a report on its financial position and activity within six months of the close of each fiscal year. In addition, this report must be audited in accordance with auditing standards generally accepted in the United States of America by an independent firm of certified public accountants. Pursuant to that requirement, we hereby issue the Comprehensive Annual Financial Report of the City of Springfield for the fiscal year ended June 30, 2018. This report consists of management’s representations of the City’s finances. Consequently, responsibility for the accuracy of the data and for the completeness and fairness of the presentation, including all disclosures, rests with management. To provide a reasonable basis for making these representations, management has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse, and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with Generally Accepted Accounting Principles (GAAP). Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls is designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City of Springfield’s financial statements have been audited by Grove, Mueller & Swank, P.C., a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Springfield for the fiscal year ended June 30, 2018, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City of Springfield’s financial statements for the fiscal year ended June 30, 2018, are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Springfield’s MD&A can be found immediately following the report of the independent auditors.

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Profile of the Government The City of Springfield was incorporated on February 25, 1885. The City has a council-manager form of government. The six-member City Council sets overall city policy and goals. The City Council also makes laws, or ordinances, which govern the City. Councilors are nominated from one of six wards and are elected at large for four-year staggered terms. The Mayor, elected at large to a four-year term, is the chief elected officer of the City and is responsible for providing political and policy leadership for the community. The Mayor has no executive power, but presides at City Council meetings and serves as the ceremonial head of the City. Home to approximately 60,865 people, Springfield is bordered north and south by the McKenzie and Willamette Rivers, covering approximately 15 square miles in Lane County. The Springfield community has rich cultural assets, such as the Springfield Museum and Historic Interpretive Center, Washburne Historic District, Springfield Railroad Depot, Oregon Trail Mural, and Dorris Ranch Living History Farm. The City provides a full range of municipal services. These services include police, fire, emergency medical services, municipal court, community planning and development, library, wastewater management, stormwater management, general public works, central service administration, and other functions associated with a full-service city. For financial reporting purposes, the City includes all funds subject to appropriation by the City Council. In addition, the City includes all governmental organizations and activities for which the City Council is financially accountable. Therefore, the financial statements of the Urban Renewal Agency of the City of Springfield, although legally separate, have been blended with those of the City by including them in the appropriate statements and schedules in this report. Other potential component units have been evaluated and determined not to be component units of the City according to the criteria provided by the Governmental Accounting Standards Board. For financial planning and control, the City prepares and adopts an annual budget in accordance with Oregon law. The law establishes standard procedures for preparing, presenting, and administering the budget. It requires citizen involvement in the preparation of the budget and public disclosure of the budget before final adoption. The activities of all the funds of the City (except the Agency Fund, which accounts only for non-budgeted pass-through monies) are included in the annual budget, as required by state law. The City prepares its budget, as allowed under Oregon law, using the modified accrual basis method of accounting. The legally adopted budget is presented at the departmental level for current expenditures, with separate appropriations established for capital projects, debt service, inter-fund transfers, miscellaneous fiscal transactions, statutory payments, contingencies, unappropriated fund balances, and reserves. Under the changes made by Measure 50, Oregon’s municipalities now levy their annual property taxes on a partial rate-based levy system. Springfield has been assigned a permanent tax rate of $4.7403 per thousand dollars of assessed valuation for its annual property tax operating levy. This amount can be temporarily overridden through the use of voter-approved serial levies. In November 2012, Springfield voters renewed a special purpose five-year property tax levy for police, municipal court, and jail services at a rate of $1.28 per thousand for five years beginning July 1, 2013. Subsequently, in November 2017, Springfield voters re-authorized that levy for another five years at an increased rate of $1.40 per thousand. In November 2015, voters re-authorized the levy for fire and life-safety services at a rate of $0.36 per thousand beginning July 1, 2016. Springfield still has the authority to levy an additional dollar value property tax levy for the retirement of its voter-approved general obligation bond debt. For the fiscal year

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ended June 30, 2018, the amount of the tax levy for general obligation bonded debt was $0.40 per thousand. Local Economy Springfield is located in the southern Willamette Valley of Western Oregon, in close proximity to the Pacific Ocean and Cascade Mountain Range. Springfield is Oregon’s ninth-largest city and the second-largest city in Lane County. Springfield is located immediately east of Eugene and separated only by Interstate 5, which connects Springfield to the Portland metropolitan area and Washington state to the north and California to the south. The City of Springfield, Oregon continues to see gradual positive impacts of the long economic recovery, with continued patterns of investments in local manufacturing and traded sector activities, increased values in property, momentum in private and public projects, and decreases in city-wide residential inventory and commercial and industrial vacancy rates. Area businesses and local partners continue to play a role in this recovery by investing in existing Springfield facilities and Springfield employees and partnering with one another to improve the business ‘climate’ through sourcing relationships, events, and peer-to-peer support. These investments can be seen clearly in increased interest and use of the Springfield Community Enterprise Zone, a mechanism which incentivizes taxable investment and growth of workforce. With an emphasis on removing policy barriers to investment in infrastructure and support of existing industry retention and expansion, the City Council continues to champion projects and initiatives which prioritize the economic vitality of the community, improving the lives of Springfield citizens. The economic vitality of Springfield and the financial health of the City government is linked to healthy population growth and the number of quality jobs available in our community (Springfield Economic Look, 2017). Property Values: Total assessed property values have steadily increased for the last five fiscal years, increasing by 3% between FY17 and FY18. This is consistent with the increase between FY16 and FY17. In total, FY18 assessed property values in the City of Springfield totaled just over $4.6 billion, an increase of $152 million over FY17.

Source: Lane County, OR Assessment & Taxation Department

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Population Growth:

Springfield population trends have traditionally lagged behind those of the region, with estimated growth over the last 10 years ranging between 0% and 1%. Between 2016 and 2018, the City of Springfield saw a nearly 1% growth, similar to that of Eugene and Lane County at 1.1% and 1.3% growth respectively. Population growth consistently slowed regionally but more significantly in Springfield with only 0.3% growth from 2017 and 2018, bringing the City of Springfield population to 60,865, a difference of 210 community members from 2017. These trends may be attributable to a number

of variables, including population estimation methodology used by the Portland State University Population Research Center, but also impacts of existing limited housing supply and land, rising costs of construction, and trends in new single and multi-family housing starts. Population growth for the City of Springfield from 2017 through 2018 showed greater increases than years prior. When compared to trends in residential units constructed, the largest increase in new starts occurred two years prior, beginning in 2015.

Job Growth: Job growth continues to increase in Lane County with unemployment in Springfield decreasing from 4.6% in FY17 to 4.4% in FY18. While slightly higher than the State-wide average of 4.1%, trending remains consistent with state averages over time, and most importantly, on a positive downward trend. Overall, the City of Springfield and Lane County unemployment rates maintain similar trends to those captured state-wide and nationally. While the continued decline in unemployment within the City of Springfield and greater Lane County is both significant and promising, other regional indicators continue to indicate slower overall growth than state averages.

Source: State of Oregon Employment Department Qualityinfo.org; LAUS Reflected as Seasonally Adjusted Average of Year beginning July through June. Typical LAUS Reporting Reflects Calendar Year.

Source: Portland State University; Population Research Center. https://www.pdx.edu/prc/population-reports-estimates

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Springfield Target Industries:

Springfield continues to see industry growth and opportunity in a wide range of nationally projected high output industries through 2024, including the highest projected industry: software publishers. This competitive advantage is of note for Springfield with the significant FY18 impacts of the Springfield Symantec Site downsizing, creating brief opportunity for local talent to be made available for new company expansions. In FY18, the City of Springfield participated in the successful recruitment of two significant technology firms specializing in software publishing and customer

service. Both of these firms hired substantial Symantec talent, allowing community members to grow in new opportunities in Springfield and Eugene. These efforts will continue with substantial goals that may create a brief influx of employment talent available on the local labor market. The downsizing of Symantec also created opportunities for nearby existing Springfield employers, like IEQ Technologies and Royal Caribbean Cruises Ltd., to hire much desired and well trained talent. In FY18, Royal Caribbean was estimated to employ 800 people. In FY18, the City of Springfield maintained a focus on local industry trends, prioritizing target industries for economic development with large footprints from a physical, economic, and employment standpoint. Springfield target industries include; advanced timber manufacturing, technology, craft food and beverage, and medical technology. Springfield Significant Industry: The Springfield traded sector target industries are reflective of both future goals and also existing significant economic footprints. Industry location quotients (LQ) quantify the relative “concentration” of an industry compared to other areas within the United States. A LQ of zero indicates that a particular region is no more or less likely to host an industry than any other region. Where an area has a concentration of industries at a higher LQ, the area is demonstrating an area of industry density or specialty. The Springfield target industries are, primarily, reflective of industries with high local LQs, illustrating that Springfield already offers existing infrastructure, workforce, supply chains, and opportunities to facilitate successful operation and growth within these industries.

Source: IMPLAN ES202 data, Bureau of Labor Statistics Employment 2015

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Springfield Industry Employer Sampling: The City of Springfield’s positive relationships with existing employers is a hard-earned and critical resource in fostering trust and facilitating opportunities to support growth and expansion of those industries and, specifically, employers. Employment data specific to an individual private employer is highly sensitive and considered protected information by the State Employment Department. Any provision of listed private employers with directly attributed private employment numbers would be speculative and at the risk of compromising established long-term relationship. A sample list of significant employers and estimated employment numbers is provided below based on information voluntarily and knowingly provided by Springfield employers.

Industry Employer 2018 Estimated Average Annual Employees

+ / - Over 2017

2017 Estimated Average Annual Employees

Public Sector Springfield Public Schools 1380 + 1241 Public Sector City of Springfield 400 - 410 Public Sector Willamalane 360 - 381 Public Sector State Government 310 + 308 Public Sector Federal Government 207 + 171 Medical Services Peace Health Corporation 3500 - 5500 Medical Services McKenzie-Willamette Medical Center 940 + 880 Wood Products Top 3 Wood Products Employers 780 + 522 Technology Top 3 Technology Employers 1200 - 1800 Food & Beverage Top 3 Food Beverage Employers 410 + 400

Source: Public Sector employer estimates provided by the State of Oregon Employment Department. All other private employer estimates are considered protected information by the State Employment Department and reflective of estimates gathered through standard business retention efforts.

Springfield Significant Event Sampling: Manufacturing; Wood Products, Food and Beverage, and General Manufacturing: • Swanson Lumber Mill Rebuild –

The Swanson’s Group mill rebuild continues to be an example of Springfield’s incredible will and innovation. The rebuild, following a devastating 2014 fire, was completed and back in production by 2016. The mill continues to add state of the art equipment and jobs, showcasing one of the highest technology manufacturing facilities on the west coast. The site includes a new 330,000-square-foot veneer plywood layup operation, over 200 employees, and an investment estimated at over $55 million in facility and equipment. The site is a beneficiary of the Springfield Community Enterprise Zone which provided a five-year extended property tax abatement. The first non-exempted property tax year will be 2022.

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• International Paper – In early FY16, the City of Springfield and Lane County authorized a five-year enterprise zone property tax abatement to International Paper. This authorization supported the estimated $101.6 million facility upgrade at their 42nd Street area paper mill. This investment received the first tax exemption in 2017 and 2022 will be the first non-exempted property tax year. The site currently employs over 275 employees and is responsible for the manufacturing of kraft liner/containerboard, supplying to key customers around the world (Pacific Northwest, California, Japan, Korea and China).

• Cross Laminated Timber and the Glenwood Riverfront – Developing the Glenwood Riverfront project area and site infrastructure to connect the community to the river continued as a priority initiative for the City of Springfield, with an emphasis on successfully completing the negotiations and acquisition of key properties. These negotiations were completed in FY18, paving the way for a final acquisition and future development of infrastructure, the Cross Laminated Timber Parking Structure, and a mix of housing, commercial and hospitality development. The marketing of the site and recruitment of development partners will begin in FY19.

• Franz Bakery – Franz Bakery (owned by United States Bakery) moved forward in FY18 with the selection of their Springfield-Glenwood site as the location for their next substantial company investment. The determination to invest in the Springfield bakery was supported by the City with the use the Springfield Community Enterprise Zone extended abatement. The project, set to begin construction in FY19, will include an estimated $20 million facility expansion, increasing their facility to over 200,000 square feet from the current 150,000 square feet. The project anticipates adding 45 new full time employees and a new organic breadline. The project will be completed and the new bread line placed into service during FY19. Currently, Franz employs approximately 220 full-time employees.

• Hyland Mid-Springfield Industrial Park – In FY18, John Hyland Construction, Inc. began and

completed construction of much needed high value and high demand industrial business space in multiple areas of Springfield. The new units at the High Banks Business Park, located just north of High Banks Road and 52nd Street, offer opportunities for a mix of small to medium sized manufacturing firms and are leasing almost immediately, showing the continued strength of the local manufacturing industry.

Healthcare: • McKenzie-Willamette Medical Center – The Mckenzie-Willamette Medical Center, located at

1460 G Street, continued construction of their major additions and renovations to hospital facilities in Springfield Mohawk area. The project has added nearly 153,000 square feet of space and an additional 56,000 square feet of renovations to the existing structure. The project has created private patient rooms for all patients, added private exam and trauma rooms in the Emergency Room, constructed a new patient tower with new entrance, lobby and housing a new neonatal NICU (4-bed level II neonatal intensive care unit), expanded surgical and cardiovascular units, and beds for medical and surgical patients. The cardiovascular program and chest pain center has doubled in size from eight to 16 total beds. Estimated to cost of nearly $80 million, the three-year project is nearing the final completion, estimated in early FY19.

• Oregon Medical Labs & PeaceHealth – In late FY17, PeaceHealth sold a significant portion of their laboratory business to Quest Diagnostics, a New Jersey based for-profit. As part of this sale, services, employees, and local resources were maintained in the region but shifted to Quest Diagnostic ownership during FY18. This FY17 sale/acquisition impacted FY18 PeaceHealth

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laboratory employment numbers, with some existing employees and also new hires becoming employees of Quest Diagnostics.

Technology: • Symantec – A substantial employer in the Springfield area for over 25 years, Symantec

Corporation underwent substantial downsizing during FY18. By the end of FY18, the company had maintained an estimated employment count of 150 in their Springfield facility. The City of Springfield worked closely with the firm during this timeframe to strategically position the building and employees for future success through the transition and into targeted opportunities. While the downsizing is significant, substantial new opportunities and partnerships are targeted for the site in FY19.

Leisure, Hospitality and Mixed-Use: • Transient Room Tax Collections –

Transient Room Tax (TRT) revenues in FY18 remained consistent with those received in FY17. While revenues have steadily increased during the recent years of economic recovery, FY17 and FY18 saw a slight 3% decrease in annual revenues, which was both unsurprising and anticipated due to a number of projects and trending environmental conditions. Beginning in FY18, reconstruction of the nearby Hayward Field resulted in the loss of traditional track events which previously contributed to peak hotel/tourism seasons. Additionally, Oregon wildfires substantially impacted Springfield during the first quarter of FY18, contributing to an overall direct and indirect economic impact for Springfield and the broader region with an estimated 3,000 overnight stays lost, tourism related events canceled, and visitor spending impacted. It is estimated that the Springfield TRT impact in the month of September 2017 alone to be over $20,000. Overall, Springfield hotel occupancies in FY18 remained flat over FY17 at 68%. The average daily rate (ADR) fell by just over 1%, resulting in a FY18 ADR of $97 ($98 in FY 17). These are likely reflections of a decrease in regionally held large sporting events, new hotel room inventory added in nearby City of Eugene, and seasonal weather and environmental impacts.

Source: Wildfire Smoke Impact; NASA WorldView, August 29, 2017 - Oregon

Source: Travel Lane County

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• Glenwood Fairfield Inn & Suites – As part of a City and Urban Renewal Agency land assembly project, several key properties in Glenwood were identified, assembled, prepped and sold to Alko Investments, LLC. Following the 2015 opening of a Candlewood Suites on the site, the City of Springfield sold the remaining 1.3acres to the same company which opened a second hotel in FY18, a Marriott-branded Fairfield Inn and Suites with 81 rooms and an indoor/outdoor swimming pool, bringing the total rooms available at the development to 175 rooms. The addition of the new Fairfield Inn and Suites properties contributed positively to FY18 Springfield Transient Room Tax revenues, helping to balance, in part, the impacts of regional economic and environmental variables.

The developer, Alko Investments, LLC, continues to pursue a third phase of the project at the site which is anticipated to begin in FY19.

• The Award Winning Franklin

Blvd Reconstruction Project –Franklin Blvd Phase I reconstruction broke ground in FY17 and completed construction in May of 2018, four months ahead of schedule and within budget. The project, consisting of a complete realignment, upgrades to the street and adjacent property owner driveways, two roundabouts, stormwater facilities, sidewalks, bike facilities, bus transit facilities and additional future capacity, signals the coming years of City investment in the redevelopment of the Glenwood area. Following completion, the project and project manager were awarded the 2018 American Public Works Association Project of the Year Award in the category of Transportation in the $5 million to less than $25 million. This project was funded in combination by the City of Springfield, Springfield Economic Development Agency, and the State of Oregon.

Community Placemaking: • Incentivizing Housing Development Through Springfield’s Affordable Housing Strategy –

Beginning in FY18 and extending through FY19, the City of Springfield will offer Systems Development Charge payments on behalf of developers building the newly permitted Accessory Dwelling Units (ADUs). This waiver is intended to reduce the cost to construct much needed housing while incentivizing the use of the newly Council approved smaller housing type. To support this goal, planning staff worked tirelessly with the community and City Council to revise and amend the Springfield Development Code, making it easier to build ADUs within the City. These amendments took effect in FY18.

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Long-term Financial Planning The City’s long range financial planning efforts mirror many other cities by producing trend line projections for both revenue and expenditures based upon individual analysis of both primary revenue and expenditures. As the economy continues to recover in the private sector, it has a positive influence on certain aspects of the City’s projections. However, there are also other areas where, as a public agency, it has been important to recognize the difference between where there is merely a short time-lag between the benefits of the recovery in the private and public sectors and where there is more likely a more significant long-term shift in the availability of certain resources for services. Financial policies are central to a strategic, long-term approach to financial management. Currently, the City of Springfield has a three-page document representing the Financial Management Policies and recently initiated a project to review the fiscal health of our organization starting with a review and revision of outdated policies. The current City policies have three different update characteristics; these are: (1) policies that conflict with current practices; (2) policies that are simply out-of-date; and (3) policies that require clarification. Additionally, there are important policies that are not currently addressed, as well as policies that are better left to administrative process. The Finance Department identified nine policies for potential revision with six completed to date. Our objective is to update other financial policies in order to develop a strategic, long-term approach to: (1) minimize the cost of government and reduce financial risk; (2) maintain appropriate financial capacity for present and future needs; and (3) ensure the legal use of financial resources through an effective system of internal controls. Another objective of the policy reviews was to better understand how budget decisions impact the long-term stability of the City’s financial position. A critical component is the make-up of the different accounting funds and how each has its own unique external forces that can impact its financial stability. The last recession did not treat all funds equally and lessons can be learned about the early identification of stress signs and what can be done to be able to respond in a timely manner. A part of this exercise is to ensure that staff is providing adequate guidance for the Council and Budget Committee in these matters. The City’s major operating funds for General, Building, Sewer, and Stormwater purposes all meet current Council adopted policies for maintaining adequate contingency and working capital. The City has two operating funds, the Street Fund and the Ambulance Fund, that do not fully meet the guidelines for maintaining adequate contingency and working capital at this time; however, City staff are making these two funds the top priority in its fiscal health exercise. In conjunction with the fiscal health exercise, the City is also entering its sixth year of a program called ‘priority-based budgeting’ which attempts to help make stronger correlations between the Community and Council-desired results and the prioritization and use of available resources. With the combining of the fiscal health and priority-based budgeting efforts, the City is attempting to expand its window of planned financial stability from the 1-3-5-year window to a 5-10-15-year window. During fiscal year 2018, staff worked with the City Council to update its three-to-five-year strategic outcomes that are in response to the longer term Council goals. In October 2018, staff scheduled a budget workshop with the City Council to discuss and receive direction on the next 5-year financial strategy that would begin with FY20. To prepare this workshop, projections and analytic data was updated to provide Council with the clear understanding of what strategies could best accomplish the goal of a sustainable financial future in FY24. The accompanying data indicated that many of the City services requiring additional resources through taxes are not seeing a growth in projected resources that able to support the expected cost increases due to labor contracts and

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inflationary pressures. Using historical trends, expenditure growth is estimated to outpace revenue growth by about 2%. For local governments in Oregon, such as Springfield, there is a dependency on the health of the housing and construction segment of the economy to support sustained growth. Recent planning and building activity for the City is indicating that there is a renewed confidence thathousing activity for the community may allow for improved numbers. Major remodel/rebuilds for three large local commercial enterprises have shown an economic commitment to this area by three major employers. The real market value for the City rose by just over 8% for the current year. Utility enterprise operations such as sanitary sewer and stormwater, where there is the ability for the Council to make choices about raising monthly fees, have been better able to increase revenues to meet expenditure needs. Throughout this period, the combination of tempering expenditures with modest rate increases has allowed these enterprises to continue their vital maintenance needs. The City updates it Capital Improvement Program (CIP) every two years and will be embarking on the latest update soon. Capital projects for the sanitary and stormwater programs are continuing to occur on schedule and have secure funding for the next CIP cycle. After borrowing funds in the early 2000’s to catch up on capital needs, these utilities have been able to establish adequate reserves to meet current needs. The City’s capital resources for street improvements have not been able to match capital needs and the City asked voters for the approval of a general obligation bond in November of 2018, which passed with 55% voter approval, to address the most immediate needs. The bond proceeds will fund the next street improvement projects spanning the next five years. New development pressure in two recently expanded urban growth boundary areas will begin to occur soon with a need for infrastructure expansion. Additional public/private partnerships are being explored as a way to narrow the gap between resources and project costs. Indicators of economic recovery from the private sector are still seeing mixed results for franchise and right-of-way payments received from doing business in the community. None of the four major franchise companies have shown continuous growth during the five-year period. Two have appeared to have reached a plateau at this time and may begin to show some signs of recovery while the continued economic pressures are evident in certain sectors. The City is utilizing a financial planning strategy for revenues that indicates that many of our charges for services and franchise fees have reached a level of stability, albeit lower. Our new model of projecting revenues is taking a more conservative approach and not projecting a return to the previous level of development activity. Many of the charges for services that the City is dependent upon to indicate a healthier economy rely on a strong and stable housing market while many indicators point to this being one of the last sectors of the economy to realize a recovery. Public Safety Services: The City continues to have two special-purpose taxing levies approved by the voters. Both levies were initially approved in 2002 and have been re-authorized by citizens several times. The levy for fire services allows the City to operate a fifth engine company for first response and fire services and was last approved for an additional five years beginning in FY17. The levy for police services funds additional services for patrol, dispatch, records and our municipal jail. The citizens recently renewed the police levy for an additional five years beginning in FY19.

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Urban Renewal: Within the past eleven years, the City has initiated the formation of two urban renewal districts within our community. One is for the core downtown area and the other is for the Glenwood area, located immediately adjacent to downtown and across the river. The formation of the two urban renewal districts is important to the City’s strategy for attracting new or additional commercial and industrial businesses to our area. In the recent past, the City has adopted both a Glenwood Refinement Plan and a Downtown Revitalization Plan. For the Glenwood District, the City was awarded a $6 million transportation grant from the State which will be matched by $3.6 million from the City to complete Phase I of the planned improvement for Franklin Boulevard. Construction began in June 2017 and was completed in FY18. For this District, the Council has prioritized the establishment of the boundaries for the Willamette Greenway setbacks, the installation of a riverfront path, and is working to attract an initial developer for the riverfront property. The District recently expended $5.6M to acquire property to aid in the solicitation of a developer for the first phase of a major development along the riverfront. For the Downtown District, the City has completed the second phase of the Improved Pedestrian Lighting Project as well as transportation project improvements for the core Downtown area. Also, in response to requests by Downtown merchants, the City has redesigned its parking program to include free on-street timed parking and available paid parking permits for City-owned lots. Both of these projects are a subset of the larger Main Street Visioning Project. The Urban Renewal District Board has no immediate plans for either the Glenwood or Downtown District to borrow additional resources at this time. Capital Improvements: The City of Springfield’s Capital Improvement Program (CIP) is a five‐year Community Reinvestment Plan which describes the funding and construction of City public facilities. The Council biennially approves a list of public projects, such as transportation and streets, wastewater, stormwater, and buildings and properties, which are programmed for planning, design, and construction in the next five years. Programming in the CIP is based upon the most-current estimates of available funding. Actual funding decisions are made during the City’s annual budgeting process. These projects are aimed at improving neighborhoods, providing for economic growth, improving traffic safety, and maintaining the existing City infrastructure and facilities. Some of the major projects in each of these program areas include the following: Transportation and Streets: • Street Preservation Program – In November 2018 Springfield voters passed a $10 million general

obligation bond to be dedicated to preservation of several arterial and collector streets throughout the City. It is anticipated that the bond proceeds will allow the for an overlay preservation treatment to be completed on approximately 4.7 miles. All construction is anticipated to be completed by 2022. In addition to preserving the identified segments, American with Disabilities Act facilities will be updated as required. Following is the list of projects identified in the Bond documents:

Street Length (feet) Estimated Cost Olympic Street 3,700 $1,650.000 Centennial Boulevard 2,600 $700,000 Commercial Street 450 $85,000 42nd Street 2,750 $855,000 Thurston Road 5,800 $2,500,000 High Banks Road/58th St. 4,400 $1,700,000 14th Street 1,250 $305,000 Mohawk Boulevard 3,800 $2,100,000

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• Virginia-Daisy Bicycle Boulevard/Virginia-Daisy Preservation – The City of Springfield partnered with the University of Oregon's 2011-2012 Sustainable City Year Program to plan Virginia/Daisy corridor bike boulevard improvements. Safety treatments along the entirety of the corridor may include: increased signage to slow vehicles and identify the space as a bicycle boulevard, striping of bicycle lanes, sharrows, traffic calming infrastructure (e.g., bulb-outs), and intersection treatments (e.g., mini-roundabouts). In 2015, the City received a $0.7 million State grant to implement this project. Additionally, the City has received $0.5 million in Surface Transportation Preservation – Urban (STP-U) funds to facilitate a surface preservation project on the corridor that will be completed in advance of the bicycle boulevard project. Due to funding constraints, the project has been split into three phases, with the first phase (42nd Street east to Bob Straub Parkway) currently in design and planned for construction in FY 2020. Two future phases (the 42nd Street Roundabout and 32nd Street to 42nd Street) will be completed in future years as transportation funding is secured.

Wastewater: • CMOM Planning and Implementation – The City continues to make the repair, rehabilitation, or

replacement of older wastewater pipes throughout the City a high priority in the Capital Improvement Program in an effort to reduce leakage of ground water into the system. The City continues to work on implementation of its Capacity, Management, Operations, and Maintenance (CMOM) program to remain in line with both State and Federal regulations. A flow monitoring plan and update of the collection system models is currently underway, and will lead to the 2008 Wastewater Master Plan update in future years.

Stormwater: • 42nd Street Levee Study – An initial study has been completed which identified several existing

deficiencies. It also identified areas for further study and investigation of the condition of the High Banks Road (42nd Street) Levee to identify any structural or non-structural deficiencies and to evaluate the potential for obtaining federal accreditation of this dike as a flood control facility under the National Flood Insurance Program and for compliance with the National Levee Safety Program. In October 1983, the City entered into an Agreement with the Soil Conservation Service for the operations and maintenance of the High Banks Road Dike that was constructed by Lane County in the 1950's adjacent to what is now known as 42nd Street. This dike provides flood control protection for areas of Springfield north of Highway 126 and west of 42nd Street from McKenzie River flooding. The Federal Emergency Management Agency (FEMA) has developed an accreditation program for levees that are relied upon under the National Flood Insurance Program (NFIP) and the National Levee Safety Committee has developed recommendations to Congress for a National Levee Safety Program.

• Channel 6 Flood Insurance Rate Map (FIRM) Update / Channel 6 Phase II – The Master Plan and an evaluation and update to the Flood Insurance Rate Map (FIRM) have been completed. Phase II will implement the Council approved Master Plan. Implementation will begin with an upgrade of several culverts to improve water flow and mitigate potential flooding.

• In addition to the above major projects, several other projects are also already budgeted and are currently in process or scheduled, including: Glenwood Stormwater Master Plan, Stormwater Channel Improvement, 5th Street/EWEB Path Storm Pipe, Mill Street Reconstruction, and Franklin Boulevard Phase II design.

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Major Initiatives The City Council goals for this year, along with some of the more significant activities and projects addressing those goals, are as follows:

Provide Financially Responsible and Innovative Government Services

• Urban growth boundary expansion to meet industrial zone employment needs • Infrastructure enterprise funds meet operating and capital requirements • Information technology infrastructure is available • Enhancements and customizations to existing applications will meet customer

expectations

Encourage Economic Development and Revitalization through Community Partnerships

• There is growth in the level of Glenwood Urban Renewal investment • There is growth in the level of Downtown Urban Renewal investment • Room tax receipts are meeting their set outcome measure • The infrastructure needed for growth is identified and planned • Target areas are planned and zoned for redevelopment to attract new business and

attractions and/or eliminate blighted areas • Opportunities for affordable and decent housing are increased through partnerships with

non-profit housing developers and providing assistance to low and very low-income citizens throughout the community

Foster an Environment that Values Diversity and Inclusion

• Percent of proposers on Public Works formal solicitations that self-identify as minority, women, or emerging small businesses (MWESB)

• City supports and encourages inclusion in advertisements for open positions, procurement and budgetary objectives

• Effective and appropriate language services are provided while at the Springfield Municipal Court

• Percent of qualified applicants who meet City’s workforce diversity goals Strengthen Public Safety by Leveraging Partnerships and Resources

• High priority calls are dispatched within 60 seconds of receipt • Medium priority calls are dispatched within five minutes of receipt • Low priority calls are dispatched within 10 minutes of receipt • Crime rate for property crimes is decreasing • Emergency ambulance responses are within eight minutes • Fire responses are within five minutes

Maintain and Improve Infrastructure and Facilities

• Planned infrastructure maintenance is performed • Preservation projects are completed on schedule • Out-of-service signalized intersection repaired within 48 hours of reporting • Capital projects are constructed to meet expanding needs

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CITY OF SPRINGFIELD

Organization Chart

Citizens of Springfield

Mayor and City Council

City Attorney City Manager Municipal Judge

City Manager’s Office Development and Public

Works

Finance Fire and Life Safety

Human Resources Information Technology

Library Police

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Principal City Officials June 30, 2018

Elected Officials

Mayor

Term Expiration

Christine Lundberg 2031 2nd Street Springfield, OR 97477 Council Members

December 31, 2020

Sean VanGordon 2327 Clear Vue Lane Springfield, OR 97477

Ward 1

December 31, 2022

Hillary Wylie 339 S “E” Street Springfield, OR 97477

Ward 2

December 31, 2018

Sheri Moore 1955 16th Street Springfield, OR 97477

Ward 3

December 31, 2020

Leonard Stoehr 4157 Glacier Drive Springfield, OR 97478

Ward 4

December 31, 2020

Marilee Woodrow 1009 South 59th Street Springfield, OR 97477

Ward 5

December 31, 2022

Joe Pishioneri 961 South 70th Street Springfield, OR 97478

Ward 6

December 31, 2020

Administrative Officials

Gino Grimaldi City Manager Robert J. Duey Finance Director

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Certificate of

Presented to

City of Springfield

For its Comprehensive Annual

June 30, 2017

Executive Director/CEO

Financial Reportfor the Fiscal Year Ended

Reportingin Financial

for ExcellenceAchievement

Text38: Oregon

Government Finance Officers Association

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Financial Section

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Independent Auditor’s Report

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475 Cottage Street NE, Suite 200, Salem, Oregon 97301

(503) 581-7788

INDEPENDENT AUDITOR’S REPORT To the Honorable Mayor, Members of the City Council and the City Manager City of Springfield 225 5th Street Springfield, Oregon 97477

Report on Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Springfield, Oregon (the City) as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Springfield, Oregon, as of June 30, 2018, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis (MD&A), schedule of revenues, expenditures, and changes in fund balance – budget to actual for the general fund, street fund, and police levy fund and the required supplementary information schedules for OPEB, CRP, and OPERS as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the MD&A and the required supplementary information schedules for OPEB, CRP, and OPERS in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

The schedules of revenues, expenditures, and changes in fund balance – budget to actual for the General Fund, Street Fund, and Police Levy Fund are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basis financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the budgetary comparison information is fairly stated in all material respects in relation to the basic financial statements as a whole.

Other Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The other supplementary information, introductory section, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The other supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the other supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

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The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards Reports on Other Legal and Regulatory Requirements

In accordance with Minimum Standards for Audits of Oregon Municipal Corporations, we have issued our report dated January 15, 2019, on our consideration of the City's compliance with certain provisions of laws and regulations, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules. The purpose of that report is to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance.

GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS By: Ryan T. Pasquarella, A Shareholder January 15, 2019

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Management’s Discussion and Analysis

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MANAGEMENT’S DISCUSSION AND ANALYSIS This section of the City of Springfield’s annual financial report presents our discussion and analysis of the City’s financial performance during the fiscal year ended June 30, 2018. Please read it in conjunction with the City’s financial statements, which follow this section. FINANCIAL HIGHLIGHTS • The City’s total assets and deferred outflows of resources at June 30, 2018 decreased $2.2 million

from $339.0 million to $336.8 million, or 0.7% from the prior year. This decrease in total assets and deferred outflows of resources was primarily due to a $5.6 million decrease in the carrying value of capital assets and a $7.5 million decrease in deferred pension outflows offset by an $8.7 million increase in cash and investments, a $1.4 million increase in receivables and a $0.5 million increase in deferred OPEB outflows.

• The City’s total liabilities and deferred inflows of resources decreased by $4.5 million from $120.4

million to $115.9 million, or 4.0% from the prior year. This decrease was primarily due to a $1.7 million decrease in bonded debt and a $3.4 million decrease in the City’s net pension liability offset by a $0.5 million increase in deferred OPEB inflows.

• The assets and deferred outflows of resources of the City exceeded its liabilities and deferred

inflows of resources by $220.9 million at the close of fiscal year 2018. Unrestricted net position totaled $16.7 million with the remainder of the City’s net position invested in capital assets ($176.1 million) and restricted for capital projects, public safety, transportation, community development, debt service, and other purposes ($28.1 million).

• At June 30, 2018, the City’s governmental funds reported a combined ending fund balance of $32.0

million, an increase of $6.6 million (20.7%) from the prior year. Of this total amount, $8.4 million (26.2%) constitutes unassigned fund balance which is available for spending at the government’s discretion, $23.3 million (72.8%) constitutes either restricted, committed, or assigned fund balance which is not available for new spending because it has already been committed to another purpose, and the remainder of the fund balance, $0.3 million (1.0%) is in a nonspendable form.

• At the end of fiscal year 2018, the unassigned fund balance in the General Fund was $8.4 million

which was 23.6 % of total General Fund expenditures. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City of Springfield’s basic financial statements. The City’s basic financial statements comprise three components: • Government-wide financial statements • Fund financial statements • Notes to the basic financial statements

Government-wide Financial Statements The government-wide financial statements report information about the City as a whole using accounting methods similar to those used by private-sector companies. The statement of net position presents information on all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

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The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes). Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include:

• General Government • Fire and Life Safety • Police • Library • Development and Public Works

The business-type activities of the City include:

• Sewer • Storm Drainage • Booth Kelly (operation of the Booth Kelly Center – a large commercial building and other similar

activities) • Ambulance Service

The government-wide financial statements include not only the City itself (known as the primary government), but also a legally separate Urban Renewal Agency for which the City is financially accountable. The Urban Renewal Agency, called the Springfield Economic Development Agency (SEDA), has a governing body that is substantively the same as the City’s and City management is responsible for the Agency’s operations. For these reasons, the SEDA special revenue and capital project funds are included as an integral part of the City. The government-wide financial statements can be found on pages 57-58 of the basic financial statements. Fund Financial Statements The fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on the acquisition and use of current spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar

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information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and government activities. The reconciliations can be found on pages 59 and 61 in the basic financial statements. The City maintains 16 individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for those funds that are considered significant (major) to the City taken as a whole. These financial statements report three funds: General Fund, Street Fund, and Police Local Option Levy Fund. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The City adopts an annual appropriated budget for all governmental funds. To demonstrate compliance with the budget, budgetary comparison statements have been provided for the General Fund and the major special revenue funds as required supplementary information on pages 117-119. Budgetary comparisons for all other governmental funds have been provided elsewhere in this report. The governmental funds financial statements can be found at pages 59-61 in the basic financial statements. Proprietary funds. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in government-wide financial statements. The City uses enterprise funds to account for its Sewer operations, Storm Drainage operations, Ambulance Service, and Booth-Kelly operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its equipment, including its fleet of vehicles and its computer and telecommunication equipment, for employee benefits and risk management activities, and for administrative activities related to the System Development Charge program. Because all three of these services predominantly benefit government rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary fund statements provide the same type of information as the government-wide financial statements, only in more detail. The proprietary funds financial statements provide separate information for the Sewer Fund, the Storm Drainage Fund, and the Ambulance Fund, which are all considered to be major funds of the City. Conversely, the internal service funds are combined into a single, aggregated presentation in the proprietary funds financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The proprietary fund financial statements can be found on pages 62-64 in the basic financial statements. Fiduciary funds. The City is the trustee, or fiduciary, for certain funds. The City is responsible for ensuring that the assets reported in a fiduciary fund are used for their intended purposes. The City has one fiduciary fund, the Agency Fund. All of the City’s fiduciary activities are reported in a separate statement of fiduciary net position and a statement of changes in assets and liabilities. We exclude these activities from the City’s government-wide financial statements because the City cannot use these assets to finance its operations. The fiduciary fund financial statement of net position can be found on page 65 in the basic financial statements.

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Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 66-114 of this report. Required supplementary information. This report also presents certain required supplementary information concerning budgetary comparisons for the general and major special revenue funds as well as information about the City’s progress in funding its obligation to provide pension and other post employment benefits to its employees. Required supplementary information can be found on pages 117-124 of this report. Other supplementary information. The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds, budgetary comparisons for proprietary funds, and the statement of changes in assets and liabilities of the agency fund are included in this report and can be found on pages 129-173. Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets and deferred outflows exceeded liabilities and deferred inflows by $220.9 million at the close of the most recent fiscal year. The largest portion of the City’s net position, $176.1 million (79.7%) reflects its net investment in capital assets (e.g., land and right-of-way, buildings, improvements, equipment, and infrastructure, net of accumulated depreciation), less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens. Consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

2018 2017 2018 2017 2018 2017

Current and other assets 59,382,150$ 52,383,718$ 47,291,494$ 43,998,295$ 106,673,644$ 96,382,013$

Capital assets, net, where applicable, of accumulated depreciation 135,465,267 139,453,696 77,831,489 79,419,948 213,296,756 218,873,644

Total assets 194,847,417 191,837,414 125,122,983 123,418,243 319,970,400 315,255,657

Deferred outflows of resources 12,290,529 17,852,864 4,496,367 5,916,418 16,786,896 23,769,282

Noncurrent liabilities 71,414,264 73,460,162 34,170,111 36,388,524 105,584,375 109,848,686 Other liabilities 5,262,418 5,691,887 1,539,247 1,750,096 6,801,665 7,441,983

Total liabilities 76,676,682 79,152,049 35,709,358 38,138,620 112,386,040 117,290,669

Deferred inflows of resources 2,980,877 2,718,198 523,867 417,699 3,504,744 3,135,897

Net position:

Net investment in capital assets 120,175,702 122,230,625 55,901,549 54,802,364 176,077,251 177,032,989 Restricted 22,674,644 17,295,648 5,457,331 4,733,337 28,131,975 22,028,985 Unrestricted (15,369,959) (11,706,242) 32,027,245 31,242,641 16,657,286 19,536,399

Total net position 127,480,387$ 127,820,031$ 93,386,125$ 90,778,342$ 220,866,512$ 218,598,373$

City of Springfield's Statement of Net Position

Governmental Business-typeActivities Activities Total

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A portion of the City’s net position, $28.1 million (12.7%), represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position, $16.7 million (7.6%) may be used to meet the government’s ongoing obligations to citizens and creditors.

2018 2017 2018 2017 2018 2017Revenues: Program revenues: Charges for services 9,624,408$ 9,490,802$ 21,918,787$ 22,018,852$ 31,543,195$ 31,509,654$ Operating grants and contributions 5,135,869 4,954,592 - - 5,135,869 4,954,592 Capital grants and contributions 2,177,260 4,085,842 1,164,761 2,803,923 3,342,021 6,889,765

General revenues: Taxes 36,032,025 35,583,292 - - 36,032,025 35,583,292 Payment in lieu of taxes 2,414,018 2,353,365 - - 2,414,018 2,353,365 Shared revenue 1,743,533 2,019,553 - - 1,743,533 2,019,553 Investment earnings 783,330 573,280 528,250 317,398 1,311,580 890,678 Miscellaneous receipts 1,345,586 972,473 209,703 19,552 1,555,289 992,025

Total revenues 59,256,029 60,033,199 23,821,501 25,159,725 83,077,530 85,192,924

Expenses: General government 7,450,495 8,105,716 - - 7,450,495 8,105,716 Fire and life safety 13,890,821 13,351,001 - - 13,890,821 13,351,001 Police 22,233,956 22,068,423 - - 22,233,956 22,068,423 Library 1,727,501 1,981,508 - - 1,727,501 1,981,508 Development & public works 12,687,939 12,483,443 - - 12,687,939 12,483,443 Unallocated depreciation and amortization 250,435 250,435 - - 250,435 250,435 Interest on debt 457,480 518,495 - - 457,480 518,495 Sewer - - 7,269,835 7,158,008 7,269,835 7,158,008 Drainage - - 6,316,516 5,559,128 6,316,516 5,559,128 Booth Kelly - - 1,410,609 1,424,527 1,410,609 1,424,527 Ambulance - - 6,515,453 6,574,936 6,515,453 6,574,936

Total expenses 58,698,627 58,759,021 21,512,413 20,716,599 80,211,040 79,475,620

Increase (decrease) in net position before transfers 557,402 1,274,178 2,309,088 4,443,126 2,866,490 5,717,304

Transfers 63,000 - (63,000) - - -

Increase (decrease) in net position 620,402 1,274,178 2,246,088 4,443,126 2,866,490 5,717,304

Net position - beginning, previously reported 127,820,031 126,545,853 90,778,342 86,335,216 218,598,373 212,881,069 Prior period adjustment - Note Q (84,188) - 562,967 - 478,779 - Restatement per GASB 75 implementation (875,858) - (201,272) - (1,077,130) -

Net position - beginning, as restated 126,859,985 126,545,853 91,140,037 86,335,216 218,000,022 212,881,069

Net position - ending 127,480,387$ 127,820,031$ 93,386,125$ 90,778,342$ 220,866,512$ 218,598,373$

Governmental Business-type

City of Springfield's Statement of Activities

Activities Activities Total

Entity-wide change in net position: Entity-wide net position increased by $2.9 million in the current fiscal year compared to an increase of $5.7 million in the prior year. This $2.8 million year-to-year decrease in the change in entity-wide net position can be attributed to some one-time events in both the previous and current year, the details of which are provided below. Governmental Activities. The governmental activities during the fiscal year increased the City’s net position by $0.6 million, a decrease from a prior year surplus of $1.3 million, explained by the following highlights:

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• Capital grants and contributions decreased by $1.9 million (46.7%) from the prior year and can be primarily attributed to a decrease in the transfer of infrastructure and right of way from developers to the City. While these transfers can be an indicator on the strength of development occurring within the City, they can also fluctuate from year-to-year based on factors unrelated to the level of development occurring such as the timing of completion of single large projects and when the transfer occurs. This decrease is most like the result of such timing fluctuations and the City is continuing to experience a healthy level of development activity within the City.

• Operating grants and contributions increased by $0.2 million (3.7%) from the prior year. This can be primarily attributed to a $0.4 million payment of conflagration funds reimbursing wages for assistance in fighting the 2017/2018 wildfires, and a $0.3 million decrease in federal funding from the U.S. Department of Housing and Urban Development.

• Taxes increased by $.5 million (1.3%) from the prior year and can be partially attributed to a $0.2

million increase in property tax receipts resulting from a continuation of appreciation of property values in the City. This continued appreciation in property values is a strong indicator of a healthy local economy and a strong housing market. Additionally there was a $0.1 million increase in transient room taxes and $0.1 million increase in local fuel tax.

• Shared revenue decreased by $0.3 million (14%) from the prior year. This decrease from the prior year and can be primarily attributed to the City’s first receipts from the State of Oregon for both local and state tax revenue from the sale of recreational marijuana in the prior year. This spike in the prior year resulted from a new revenue and the delay, and subsequent catch up, in turning those revenues over to the individual cities.

• Investment earnings in total increased by $0.4 million (47.3%) from the prior year and can be primarily attributed to an increase in the interest earned on its investments.

• Primary government expenses as a whole stayed flat, while charges for services saw a minor

increase of $134,000 (1.4%) from the prior year.

• Interest on long-term debt decreased by $61,015 (11.8%) from the prior year and can be attributed to the payoff of a fire station loan.

The net position decreased in governmental activities by $0.9 million due to the implementation of GASB Statement No. 75 and the resulting restatement. See Note O in the Notes to Financial Statements section of this report. In addition, net position decreased by $0.1 million as a result of a prior period adjustment explained in further detail in Note Q in the Notes to Financial Statements.

46

Chart 1

Chart 1 compares program revenues and expenses for the individual governmental activities for the current year. As the chart reflects, most governmental activities relied on general revenues to support the function.

Chart 2 Chart 2 shows the percent of the total for each source of revenue supporting governmental activities. The chart demonstrates that the City depends on taxes as its major source of revenue. The City is making a deliberate effort to increase revenues generated by charges for services both by implementing new fees and by increasing the cost recovery percentage on existing fees.

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Business-type Activities. The change in business-type activities decreased from a $4.4 million surplus in the prior year to $2.2 million in the current year. This decrease of $2.2 million can be explained by the following highlights:

• Total operating expenses for all business-type activities increased by $0.8 million (3.8%) from the prior year, which can be attributed to normal inflationary pressures.

• Total revenues decreased by $1.3 million (5.3%) from the prior year and can be primarily attributed to a 2.5% rate increase in sewer fees and a 3.5% rate increase in stormwater fees offset by an 11% decrease in net ambulance billings.

• Sewer expenses increased by $0.1 million (1.6%) from the prior year as a result of normal

inflationary factors offset partially by position allocation changes between sewer and storm funds during the year. Sewer revenues increased 3.63% which is consistent with the rate increase.

• Storm drainage expenses increased by $0.8 million (13.6%) from the prior year as a result of

normal inflationary pressures as well as some staff reassignment from the Sewer Fund and reorganization within the public works department. Revenues increased 2.9% as a result of rate increases.

• Ambulance expenses showed no significant change from the prior year, although the revenue

related to ambulance billings decreased by 11%.

Chart 3

Chart 3 compares program revenues and expenses for the individual business-type activities for the current year. The Sewer, Storm Drainage, Ambulance, and Booth Kelly Funds all relied on program revenue to fund operating expenses.

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Chart 4

Chart 4 shows the percent of the total for each source of revenue supporting business-type activities. The largest component of business-type fund revenue comes from charges for services. Financial Analysis of the Government’s Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $32 million. Of this total amount, $8.4 million (26.2%) constitutes unassigned fund balance which is available for spending at the government’s discretion, $23.3 million (72.8%) constitutes either restricted, committed, or assigned fund balance which is not available for new spending because it has already been committed to another purpose, and the remainder of the fund balance, $0.3 million (1.0%) is in a nonspendable form. The General Fund is the chief operating fund of the City of Springfield. At the end of the current fiscal year, unassigned fund balance of the General Fund was $8.4 million, while the total fund balance was $9.7 million. As measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 23.6% of total General Fund expenditures, while total fund balance represents 27.4% of that same amount.

49

The fund balance of the City’s General Fund increased by $1.0 million during the current fiscal year compared to a decrease of $0.1 million in the prior year. This year-to-year increase of $1.1 million can be explained by the following highlights:

• Property taxes increased by $0.7 million (3.6%) from the prior year and can be attributed to normal growth resulting from the strengthening of property values in the City.

• Licenses, permits, and fees decreased slightly (2.0%) from the prior year and can be attributed to a leveling out after a small spike in all City license, permit, and fee revenue in fiscal year 2017.

• General government expenditures decreased by $0.1 million (2.3%) from the prior year and can

be primarily attributed to a decrease in the legal costs due to a one-time expense in the prior year.

• Fire and Life Safety expenditures increased by $0.6 million (5.5%) from the prior year and can be primarily attributed to a $0.2 million increase in overtime costs as well as normal inflationary pressures.

• Police expenditures remained relatively flat with an insignificant increase of (0.2%) from the

prior year. This was driven by unfilled vacancies, offset by normal inflationary factors. • Debt service in the general fund decreased by $0.5 million to zero in the current year as a result of

the early payoff of the loan used to construct Fire Station 16. The Street Fund balance increased by $0.7 million in the current fiscal year compared to a prior year increase of $0.1 million. This year-to-year increase of $0.6 million can be primarily attributed to state highway apportionment revenue that increased $0.3 million from the prior year and reduced expenses for vehicle and equipment rent from fiscal year 2017. The Police Local Option Levy Fund balance decreased by $0.3 million in the current year compared to a decrease of $0.1 million in the prior year. This year-to-year decrease of $0.2 million can be primarily attributed to a $0.2 million increase in property tax revenues, a $0.2 million increase in charges for service revenue and 0.6 million in operating expenses split evenly between personnel and materials and services. The expense increases were a combination of increased overtime and several one-time expenses such as election costs and a security system. Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. As of the end of the current fiscal year, the City’s proprietary funds reported a combined ending net position of $93.4 million. Of this amount, $32.0 million (34.3%) constitutes unrestricted net position. Proprietary fund highlights are as follows: The Sewer Fund reported a $1.7 million increase in net position. The sewer rates are set to provide for sufficient net operating revenue to fund capital projects in the sewer system, as well as comply with bond covenants. The user rate increase in the current year was 2.5%, and net operating income remained flat. The change in net position was less than the prior year driven mainly by lower capital contributions. The Storm Drainage Fund reported a $1.6 million increase in net position. The storm rate increase of 3.5% was a factor in the increase, and helps produce sufficient net revenue to fund capital projects and satisfy bond requirements. The most significant difference between the 2017 net position increase ($2.7

50

million) and the 2018 net position increase ($1.6 million) was a reduction in capital contributions of $0.9 million. The Ambulance Fund reported a $1.0 million decrease in net position. This decrease was primarily due to a significant decrease in net revenues (6.3%) resulting from the loss of ambulance billing customers as the market for such services becomes increasingly competitive in the local area. This combined with a loss in Medicare reimbursements has reversed the positive trend in revenue growth the Ambulance Fund was experiencing in the last several years. Other factors concerning the finances of the enterprise funds can be found in the previous discussion of the City’s business-type activities. General Fund Budgetary Highlights The difference between the original budget and the final amended budget was a net increase of $1,175,740. Details of this increase are as follows:

• $ 309,462 increase to General Government • 12,140 increase to Library • 5,000 increase to Development Services • 305,838 increase in Fire & Life Safety • 50,000 increase in Police • 25,823 increase in transfers • 467,477 increase in the City reserves

For actual expenditures, the City General Fund under spent the amended budget by $1,360,265. The continuation of the impacts of the economic recession is still noticeable in the trending of two significant revenue sources for the City: charges for service and licenses, permits, and fees. Improvement is being seen in both of these categories although they remain below the pre-recession levels. Property tax revenues trending for this same period indicate that while most residential property has moved back to or beyond pre-recession levels. These differences in actual revenue received compared to the amended budget are as follows:

• $ 247,607 increase in property taxes • 134,382 increase in licenses, permits and fees • 161,746 increase in intergovernmental revenues • 72,803 increase in interest and investment earnings • 139,576 decrease in charges for service • 87,368 decrease in fines and forfeitures • 19,928 decrease in miscellaneous revenues • 413,574 decrease in internal transfers • 786,729 increase in beginning cash (amended over adopted budget)

For the year ended June 30, 2018, the total variance between the final amended budgeted revenue and the actual budget-basis revenue amounts in the General Fund (both less beginning cash) was 0.12%, where actual revenues were less than budgeted revenues. The combined actual current and delinquent property tax revenues exceeded the budgeted amounts by 1.22% and the City actual growth rate was in line with expectations. Licenses and permits continue to grow as the economy improves, but the City is still experiencing a reduction from previous strong economy levels. Fines and forfeitures were lower as

51

municipal court revenue continues to experience delinquent accounts combined with efforts to offer alternative sentencing options. Beginning fund balance on July 1, 2017 was $786,729 greater than budgeted (10%) while ending fund balance on June 30, 2018 was $871,730 (9.9%) greater than was projected in the FY19 adopted budget. Capital Asset and Debt Administration Capital Assets. The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2018, amounts to $213.3 million (net of accumulated depreciation). This investment in capital assets includes land, buildings, sewer pipes, improvements, machinery and equipment and roads. Major capital asset events and improvements during the current fiscal year included the following: • Donated streets and right of way were recorded at an estimated cost of $0.8 million.

• Street work continued on the Franklin Boulevard Recon Phase I project with expenditures of $7.8

million to date ($0.3 million in the current year). The project was completed this year and $2.4 million of prior year costs from construction in progress was capitalized.

• The South 42nd Street Jasper Roundabout was finalized in the current year, capitalizing $0.2 million

of construction costs incurred in prior years. • The City Attorney Office, Security windows, IT Server room upgrades and other minor City Hall

improvements were done and capitalized for a total cost of $0.2 million in the current year.

• Sanitary Sewer Rehab B and C were completed and capitalized for $1.1 million in FY18.

• The Over/Under Channel was completed in the Stormwater fund for $1.6 million ($0.7 million spent in the current fiscal year). Additionally, the Franklin Boulevard storm drainage project was completed and $1.2 million dollars capitalized in FY18.

• The decrease in net capital assets from the prior year of $4 million was caused primarily by the

annual depreciation exceeding additions to capitalized assets for FY18.

City of Springfield’s Capital Assets (net of depreciation)

2018 2017 2018 2017 2018 2017

Land 67,615,125$ 67,093,122$ 6,375,436$ 6,298,566$ 73,990,561$ 73,391,688$ Land improvements - - 20,316 21,559 20,316 21,559 Work in progress 2,499,103 4,713,974 638,802 2,534,888 3,137,905 7,248,862 Buildings 21,034,465 23,219,857 69,749,665 69,207,489 90,784,130 92,427,346 Infrastructure 37,010,483 36,511,820 - - 37,010,483 36,511,820 Machinery & equipment 6,869,125 7,375,223 446,084 643,543 7,315,209 8,018,766 Studies 436,966 539,700 601,186 713,903 1,038,152 1,253,603

Total 135,465,267$ 139,453,696$ 77,831,489$ 79,419,948$ 213,296,756$ 218,873,644$

Governmental Activities Business-type Activities Total

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Additional information on the City’s capital assets can be found in Note F in the Basic Financial Statement section of this report. Debt Administration. At the end of the current fiscal year, the City had total bonded debt outstanding of $32.6 million. Of this amount, $13.1 million comprises debt backed by the full faith and credit of the City. The remainder of the City’s debt represents bonds secured solely by specified revenue sources.

City of Springfield’s Outstanding Debt General Obligation and Revenue Bonds

2018 2017 2018 2017 2018 2017General obligation bonds - 2016 13,075,000$ 14,465,000$ -$ -$ 13,075,000$ 14,465,000$ Revenue bonds series 2010 - - 7,215,000 7,650,000 7,215,000 7,650,000 Revenue bonds series 2017 - - 12,290,000 13,610,000 12,290,000 13,610,000

Total 13,075,000$ 14,465,000$ 19,505,000$ 21,260,000$ 32,580,000$ 35,725,000$

Governmental Activities Business-type Activities Total

The City’s total bonded debt decreased by $3.1 million during the current fiscal year. For additional information on the City’s long-term debt, see Note I in the Basic Financial Statement section of this report. Economic Factors and Next Year’s Budgets and Rates During the preparation of the budget for the ensuing fiscal year, the long-term impacts of the local economy were examined in conjunction with business decisions made by the City. The following are the major assumptions used in developing the FY19 budget: • Assessed (taxable) value for the City is projected to increase by 3.25%. Residential should receive an

increase of 3.0% under the guidelines established by Measures 49 and 50, industrial is likely to remain flat and expectations are for a slight increase in commercial property values. A major mill fire in the community in July 2014 will continue to have an impact on the City’s real market and assessed valuation for several more years.

• Earnings on investments, primarily government and corporate bonds, may reach 3.0% with the overall market possibly viable for debt refinancing.

• Inflation will not be a major factor during the next fiscal year as it appears that Federal Reserve is

following its intent to start slowly raising rates on a quarterly basis. • AFSCME employees, the City’s smallest employee group, will receive a 2.5% cost of living

adjustment on July 1, 2018. SEIU employees received market pay adjustments July 1, 2018 as a result of a market survey completed in the spring of 2018 that resulted in an average increase of approximately 3%. No additional increases are expected in FY19. Non-union employees received their first increase in 3 years on July 1, 2018, also a result of a completed market study.

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• Springfield Police Association (SPA) employee’s current contract covers the 3 year period from July 1, 2017 through June 30, 2020 and provides for a 3% cost of living increase in each of the next two years.

• The International Association of Fire Fighters (IAFF) now has two contracts with the City as the battalion chiefs are now a separate represented unit. The main contract has been negotiated with a three year contract that will expire on June 30, 2021. Members represented by this contact will receive a cost of living increase on July 1, 2018 and July 1, 2019 of 2.5%. The battalion chief’s contract will expire on June 30, 2021 and calls for a cost of living increase on July 1, 2018 and July 1, 2019 of 2.5%, and another increase of 1% on January 1, 2019 and January 1, 2020.

• The plan year for health insurance is the calendar year. Beginning January 2013, the City initiated a self-funded insurance program with the administration of the program contracted out to a private provider. The City’s experience factors since becoming self-insured have been very positive. For January 1, 2018, the City held rates flat. For the plan year beginning January 1, 2019, the City is not projecting an increase.

• Oregon PERS rates are bi-annual and rates were adjusted on July 1, 2017 and in effect until June 30,

2019. No rate change occurred on July 1, 2018. The City has three separate PERS retirement rates for its employees with the lowest % rate increase being 8.34% and the highest at 16.85% with an estimated dollar impact over the two year period of $2.9 million. For FY20 the City is planning for a rate hike of about 29%. This relative impact is expected to be seen in each biennium for the next six-to-ten years.

• The City schedules an updated actuarial study of its City Retirement Plan every two years. The next

update is as of June 30, 2018 and will be completed in the fall of 2018 and implemented on July 1, 2019. The percentage of payroll contribution for members of this plan increased on July 1, 2017 from 27.8% to 30.0% and will continue at this rate through June 30, 2019.

• The economic response towards building and construction activity is expected to increase at a

consistent pace for the next year. Growth in building permit revenue is expected to slow as several major commercial rebuilds have been completed but residential is expected to continue to show improvement. Larger multi-house subdivisions appear to be in the planning stages with smaller clusters of new housing still being built. The recently re-built lumber mill destroyed by fire is back in operation but will remain below pre-shutdown levels.

• Monthly rates for both the City’s sewer and storm water drainage programs increased on July 1, 2018

as a result of increased costs. The local storm water increase was 2.5% and the local wastewater increase was 2.5%.

Requests for Information This financial report is designed to provide a general overview of the City’s finances for those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: Accounting Manager City of Springfield 225 Fifth Street Springfield, OR 97477

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Basic Financial Statements

55

56

Governmental Business-typeActivities Activities Total

ASSETS Cash and investments 52,555,624$ 41,935,955$ 94,491,579$ Receivables, net of allowance for

uncollectable receivables 6,615,681 3,170,354 9,786,035 Internal balances (608,638) 608,638 - Inventory 272,368 - 272,368 Investment in foreclosed properties 1,970 - 1,970 Prepaid items 157,118 28,730 185,848 Deposits 200,000 - 200,000 Accrued interest 188,027 141,043 329,070 Due from other governments - 1,406,774 1,406,774 Capital assets:

Land and work in progress 70,114,228 7,014,238 77,128,466 Other capital assets, net of accumulated depreciation 65,351,039 70,817,251 136,168,290

Total assets 194,847,417 125,122,983 319,970,400

DEFERRED OUTFLOWS OF RESOURCESDeferred pension outflow 11,658,826 3,573,344 15,232,170 Deferred OPEB outflow 351,431 158,991 510,422 Deferred charge for debt refunding 280,272 764,032 1,044,304

Total deferred outflows of resources 12,290,529 4,496,367 16,786,896

LIABILITIES Current liabilities:

Accounts payable 2,592,411 504,715 3,097,126 Accrued payroll and other liabilities 2,484,620 553,390 3,038,010 Unearned revenue 138,682 247,420 386,102 Accrued interest payable 41,126 187,083 228,209 Deposits 1,500 46,639 48,139 Due to other governments 4,079 - 4,079

Noncurrent liabilities:Due within one year:

Accrued claims liabilities 227,722 - 227,722 General obligation long-term debt 1,445,000 - 1,445,000 Revenue bonds payable - 1,695,000 1,695,000 Notes payable 527,682 739,418 1,267,100 Capital leases 143,635 - 143,635

Due in more than one year:Accrued absence payable 3,232,459 643,118 3,875,577 Accrued claims liabilities 480,278 - 480,278 General obligation long-term debt (net of unamortized premium) 13,473,847 - 13,473,847 Revenue bonds payable (net of unamortized discount) - 19,495,522 19,495,522 Notes and contracts payable 3,979,283 506,567 4,485,850 Capital leases 297,355 - 297,355 Net pension liability 41,730,526 9,679,298 51,409,824 Net OPEB obligation 5,876,477 1,411,188 7,287,665

Total liabilities 76,676,682 35,709,358 112,386,040

DEFERRED INFLOWS OF RESOURCESDeferred pension inflow 2,646,965 359,237 3,006,202 Deferred OPEB inflow 333,912 164,630 498,542

Total deferred inflows of resources 2,980,877 523,867 3,504,744

NET POSITIONNet investment in capital assets 120,175,702 55,901,549 176,077,251 Restricted for:

Capital projects 1,595,051 5,457,331 7,052,382 Public safety 2,791,703 - 2,791,703 Transportation 5,697,743 - 5,697,743 Urban renewal 6,370,657 - 6,370,657 Community development 5,217,334 - 5,217,334 Debt service 643,068 - 643,068 Other purposes 359,088 - 359,088

Unrestricted (15,369,959) 32,027,245 16,657,286

Total net position 127,480,387$ 93,386,125$ 220,866,512$

The accompanying notes are an integral part of this statement.


STATEMENT OF NET POSITION

June 30, 2018

57

Functions/Programs Charges Operating Capital Grants Total Totalfor Grants and and Governmental Business-type

Expenses Services Contributions Contributions Activites Activities TotalPrimary government:Governmental activities:

General government 7,450,495$ 4,248,830$ 63,104$ 31,500 (3,107,061)$ -$ (3,107,061)$ Fire and life safety 13,890,821 1,916,552 408,233 - (11,566,036) - (11,566,036) Police 22,233,956 715,863 294,876 - (21,223,217) - (21,223,217) Library 1,727,501 117,114 106,012 - (1,504,375) - (1,504,375) Development and public works 12,687,939 2,626,049 4,263,644 2,145,760 (3,652,486) - (3,652,486) Depreciation, unallocated 250,435 - - - (250,435) - (250,435) Interest on long-term debt 457,480 - - - (457,480) - (457,480)

Total governmental activities 58,698,627 9,624,408 5,135,869 2,177,260 (41,761,090) - (41,761,090)

Business-type activities:Sanitary sewer 7,269,835 7,709,636 - 924,753 - 1,364,554 1,364,554 Storm drainage 6,316,516 7,194,627 - 240,008 - 1,118,119 1,118,119 Booth Kelly 1,410,609 1,630,764 - - - 220,155 220,155 Ambulance 6,515,453 5,383,760 - - - (1,131,693) (1,131,693)

Total business-type activities 21,512,413 21,918,787 - 1,164,761 - 1,571,135 1,571,135

Total primary government 80,211,040$ 31,543,195$ 5,135,869$ 3,342,021$ (41,761,090) 1,571,135 (40,189,955)

General revenues:Property taxes 30,910,303 - 30,910,303 Payment in lieu of taxes 2,414,018 - 2,414,018 Franchise & utility taxes 2,405,662 - 2,405,662 Local fuel tax 1,162,188 - 1,162,188 Transient room tax 1,553,872 - 1,553,872 Shared revenue 1,743,533 - 1,743,533 Investment earnings 783,330 528,250 1,311,580 Miscellaneous 1,345,586 209,703 1,555,289

Transfers 63,000 (63,000) -

Total general revenues and transfers 42,381,492 674,953 43,056,445

Change in net position 620,402 2,246,088 2,866,490

Net position, beginning, as restated (Note Q) 126,859,985 91,140,037 218,000,022

Net position, ending 127,480,387$ 93,386,125$ 220,866,512$


Primary GovernmentProgram Revenues

Net (Expense) Revenue and Changes in Net Position

City of Springfield, OregonSTATEMENT OF ACTIVITIESFor the Year Ended June 30, 2018

58

Nonmajor TotalGeneral Street Police Levy Governmental Governmental

ASSETSCash and investments 10,576,180$ 1,321,889$ 1,382,051$ 19,405,470$ 32,685,590$ Receivables:

Accounts 1,343,600 697,452 62,613 338,530 2,442,195 Taxes 1,328,160 - 368,351 447,795 2,144,306 Grants - - - 140,750 140,750 Accrued interest 50,472 2,950 6,975 60,658 121,055 Assessments and liens - - - 79,717 79,717 Notes - - - 1,746,485 1,746,485 Deferred system development charges 1,234 - - 644,418 645,652

Inventory 2,775 242,982 - - 245,757 Investment in foreclosed property 1,970 - - - 1,970 Prepaid items 59,663 - - 1,016 60,679

Total assets 13,364,054$ 2,265,273$ 1,819,990$ 22,864,839$ 40,314,156$

LIABILITIES, DEFERRED INFLOWS OFRESOURCES, AND FUND BALANCESLiabilities:

Accounts payable 654,624$ 158,923$ 147,091$ 517,517$ 1,478,155$ Accrued payroll and other liabilities 679,822 83,455 116,995 59,829 940,101 Unearned revenue 138,682 - - - 138,682 Deposits - - - 1,500 1,500

Total liabilities 1,473,128 242,378 264,086 578,846 2,558,438

Deferred inflows of resources:Unavailable revenue 2,145,462 103,013 369,381 3,154,029 5,771,885

Fund balances:Nonspendable 64,408 242,982 - 1,016 308,406 Restricted - 1,676,900 1,186,523 16,010,130 18,873,553 Committed 293,004 - - 2,200,742 2,493,746 Assigned 1,000,000 - - 920,076 1,920,076 Unassigned 8,388,052 - - - 8,388,052

Total fund balances 9,745,464 1,919,882 1,186,523 19,131,964 31,983,833

Total liabilities, deferred inflows of resources, and fund balances 13,364,054$ 2,265,273$ 1,819,990$ 22,864,839$

Reconciliation to the statement of net position

The statement of net position reports receivables at their net realizable value. However, receivables not available to pay for current period expenditures are deferred in governmental funds. 5,771,885

Capital assets are not financial resources in governmental funds, but are reported in the statement of netposition at their net depreciable value. 129,602,555

All liabilities are reported in the statement of net position. However, if they are not due and payable in the current period, they are not recorded in the governmental funds. (62,971,700)

Internal service funds are proprietary-type funds and not reported with governmental funds. However,because internal service funds primarily benefit governmental activities, their assets, liabilities, and net position are reported along with governmental activities in the statement of net position. 23,093,814

Net position of governmental activities 127,480,387$


June 30, 2018


GOVERNMENTAL FUNDSBALANCE SHEET

59


GOVERNMENTAL FUNDSYear Ended June 30, 2018

Nonmajor TotalGeneral Street Police Levy Governmental Governmental

Revenues:Taxes 20,947,987$ 1,081,791$ 5,581,613$ 6,183,595$ 33,794,986$ Licenses, permits and fees 2,941,854 153,433 105,107 51,515 3,251,909 Intergovernmental 4,568,539 4,144,800 - 802,280 9,515,619 Charges for services 5,564,006 101,343 394,504 2,680,802 8,740,655 Fines and forfeitures 1,688,632 - - 125,310 1,813,942 Investment earnings 170,530 11,262 23,857 221,922 427,571 Special assessments - - - 13,082 13,082 Miscellaneous revenues 314,431 20,478 6,611 444,379 785,899

Total revenues 36,195,979 5,513,107 6,111,692 10,522,885 58,343,663

Expenditures:Current operating:

General government 6,306,645 253,062 713,236 628,861 7,901,804 Fire and life safety 11,409,469 - - 1,485,213 12,894,682 Police 14,000,766 - 5,667,150 80,563 19,748,479 Library 1,489,012 - - 157,787 1,646,799 Development and public works 2,337,866 4,944,817 - 1,753,375 9,036,058

Capital projects - - - 967,170 967,170 Debt service:

Principal - - - 1,695,530 1,695,530 Interest - - - 653,657 653,657

Total expenditures 35,543,758 5,197,879 6,380,386 7,422,156 54,544,179

Excess of revenues over(under) expenditures 652,221 315,228 (268,694) 3,100,729 3,799,484

Other financing sources (uses):Issuance of debt - - - 2,729,248 2,729,248 Transfers in 766,332 423,873 - 39,250 1,229,455 Transfers out (437,123) - - (729,332) (1,166,455)

Total other financing sources (uses) 329,209 423,873 - 2,039,166 2,792,248

Net change in fund balance 981,430 739,101 (268,694) 5,139,895 6,591,732

Fund balances, beginning 8,764,034 1,147,353 1,455,217 13,992,069 25,358,673 Change in reserve for inventories - 33,428 - - 33,428

Fund balances, ending 9,745,464$ 1,919,882$ 1,186,523$ 19,131,964$ 31,983,833$


STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

60

Net change in fund balances - total governmental funds 6,591,732$

Amounts reported for governmental activities in the statement of activities are different because:

Internal service funds are used by management to charge the costs of certain activities, such as insurance, vehicle and equipment replacement, and SDC administration to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities. 838,905

Governmental funds defer revenues that do not provide current financial resources. However, the Statement of Activities recognizes such revenues at their net realizable value when earned, regardless of when received. 75,616

Capital outlay is reported as expenditures in governmental funds. However, the Statement of Activities allocates the cost of capital outlays over their esimated useful lives as depreciation expense. (3,297,405)

Governmental funds do not report expenditures for unpaid compensated absences, pension liability, or other post employment benefits since they do not require the use of current financial resources. However, the statement of activities reports such expenses when incurred, regardless of when settlement ultimately occurs. (2,382,295)

Proceeds from the issuance of long-term debt provide current financial resources to governmental funds and are reported as revenues. In the same way, repayments of long-term debt use current financial resources and are reported as expenditures in governmental funds. However, neither the receipt of debt proceeds nor the payment of debt principal affect the Statement of Activities, but are reported as increases and decreases in noncurrent liabilities in the Statement of Net Position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. (1,239,579)

Decreases in inventory in governmental funds increase expenses. 33,428

Change in net position of governmental activities 620,402$

The accompanying notes are are an integral part of this statement.

For the Year Ended June 30, 2018


Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the

Statement of Activities

61

GovernmentalActivities

Nonmajor InternalStorm Service

Sewer Drainage Ambulance Booth Kelly Total FundsASSETS

Current assets:Cash and investments 21,647,173$ 17,508,383$ 1,542,837$ 1,237,562$ 41,935,955$ 19,870,034$ Accounts receivable, net of allowance

for estimated uncollectibles 1,158,427 1,324,173 617,917 69,837 3,170,354 62,228 Prepaids - - 28,730 - 28,730 96,439 Deposits - - - - - 200,000 Accrued interest 71,239 58,675 7,405 3,724 141,043 66,972 Deferred system development fees 414,218 45,021 - - 459,239 61,130 Inventory - - - - - 26,611

Total current assets 23,291,057 18,936,252 2,196,889 1,311,123 45,735,321 20,383,414 Noncurrent assets:

Capital assets - net 57,330,916 11,249,879 30,573 2,205,883 70,817,251 5,862,712 Construction in progress 441,854 196,948 - - 638,802 - Land and land rights 2,048,070 1,685,809 - 2,641,557 6,375,436 - Due from other governments 1,406,774 - - - 1,406,774 -

Total noncurrent assets 61,227,614 13,132,636 30,573 4,847,440 79,238,263 5,862,712

Total assets 84,518,671 32,068,888 2,227,462 6,158,563 124,973,584 26,246,126

DEFERRED OUTFLOWS OF RESOURCESDeferred pension outflow 1,236,693 1,066,534 1,236,693 33,424 3,573,344 218,777 Deferred OPEB outflows 67,971 62,557 26,134 2,329 158,991 12,478 Deferred charge for debt refunding 764,032 - - - 764,032 -

Total deferred outflows of resources 2,068,696 1,129,091 1,262,827 35,753 4,496,367 231,255

LIABILITIESCurrent liabilities:

Accounts payable 96,123 288,637 116,162 3,793 504,715 1,114,256 Accrued payroll and other liabilities 177,323 124,632 249,248 2,187 553,390 256,112 Accrued claims liabilities, current portion - - - - - 227,722 Accrued interest payable 116,587 66,201 - 4,295 187,083 2,146 Deposits - - - 46,639 46,639 - Notes payable - current maturity - - - 739,418 739,418 - Capital lease payable - current maturity - - - - - 143,635 Unearned revenues - - 238,542 8,878 247,420 - Revenue bonds payable - current maturity 1,245,000 450,000 - - 1,695,000 -

Total current liabilities 1,635,033 929,470 603,952 805,210 3,973,665 1,743,871

Noncurrent liabilities:Accrued absence payable 370,807 79,542 192,769 - 643,118 8,778 Accrued claims liabilities - - - - - 480,278 Revenue bonds payable (net of

unamortized premium) 12,410,887 7,084,635 - - 19,495,522 - Notes payable 506,567 - - - 506,567 - Net pension liability 3,349,893 2,888,974 3,349,893 90,538 9,679,298 592,610 Net OPEB obligation payable 387,244 361,948 648,010 13,986 1,411,188 71,779 Capital lease obligation - - - - - 297,355

Total noncurrent liabilities 17,025,398 10,415,099 4,190,672 104,524 31,735,693 1,450,800

Total liabilities 18,660,431 11,344,569 4,794,624 909,734 35,709,358 3,194,671

DEFERRED INFLOWS OF RESOURCESDeferred pension inflow 124,328 107,221 124,328 3,360 359,237 21,995 Deferred OPEB inflow 72,729 67,511 21,824 2,566 164,630 13,423

Total deferred inflows of resources 197,057 174,732 146,152 5,926 523,867 35,418

NET POSITIONNet investment in capital assets 46,164,953 5,598,001 30,573 4,108,022 55,901,549 5,421,722 Restricted for capital projects 3,972,531 1,484,800 - - 5,457,331 - Unrestricted 17,592,395 14,595,877 (1,481,060) 1,170,634 31,877,846 17,825,570

Total net position 67,729,879$ 21,678,678$ (1,450,487)$ 5,278,656$ 93,236,726 23,247,292$

Adjustment to reflect consolidation of internal service fund activities related to enterprise funds. 149,399 Net position of business-type activities 93,386,125$


City of Springfield, OregonPROPRIETARY FUNDS

STATEMENT OF FUND NET POSITIONJune 30, 2018

Business-type Activities - Enterprise Funds

62


Nonmajor

Sewer Storm Drainage Ambulance Booth Kelly Total Internal Service

Funds OPERATING REVENUES

Charges for services 7,709,636$ 7,194,627$ 14,993,353$ 1,630,764$ 31,528,380$ 12,289,225$ Less: Contractual adjustments - - (9,963,729) - (9,963,729) - Licenses, permits and fees - - - - - 144,089 Intergovernmental revenues - - 354,136 - 354,136 - Miscellaneous revenue 875 199,057 8,771 1,000 209,703 115,448

Total operating revenues 7,710,511 7,393,684 5,392,531 1,631,764 22,128,490 12,548,762

Operating expenses:Human resources - - - - - 9,769,654 Finance 14,737 14,715 - - 29,452 28,580 Information technology 247,549 187,003 - - 434,552 274,509 Library - - - - - 6,441 Fire and life safety - - 6,429,813 - 6,429,813 107,650 Police - - - - - 13 Development and public works 3,686,331 5,280,251 - 490,643 9,457,225 870,157 Depreciation 2,778,605 505,728 8,390 843,967 4,136,690 1,271,223

Total operating expenses 6,727,222 5,987,697 6,438,203 1,334,610 20,487,732 12,328,227

Operating income (loss) 983,289 1,405,987 (1,045,672) 297,154 1,640,758 220,535

Nonoperating revenues (expenses):Investment earnings 267,368 218,677 28,119 14,086 528,250 251,386 Interest expense (432,536) (242,009) - (76,010) (750,555) (13,315) Gain on disposal of equipment - - - - - 77,436

Total nonoperating revenues (expenses) (165,168) (23,332) 28,119 (61,924) (222,305) 315,507

Income (loss) before contributions and transfers 818,121 1,382,655 (1,017,553) 235,230 1,418,453 536,042

Transfers out - - - (63,000) (63,000) (5,290) Capital contributions 924,753 240,008 - - 1,164,761 6,958

Change in net position 1,742,874 1,622,663 (1,017,553) 172,230 2,520,214 537,710

Net position, beginning of year as restated (Note Q) 65,987,005 20,056,015 (432,934) 5,106,426 22,709,582

Net position, end of year 67,729,879$ 21,678,678$ (1,450,487)$ 5,278,656$ 23,247,292$

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds. (274,126)

Change in net position of business-type activities 2,246,088$


Business-type Activities - Enterprise Funds


PROPRIETARY FUNDSSTATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION


63


Nonmajor InternalStorm Service

Sewer Drainage Ambulance Booth Kelly Total Funds

7,681,599$ 6,959,144$ 4,749,945$ 1,635,151$ 21,025,839$ 12,225,625$ (2,030,741) (3,194,917) (4,203,789) (89,675) (9,519,122) (668,396)

(1,754,903) (1,731,160) (2,174,562) (390,549) (6,051,174) (10,467,161) 875 199,057 362,907 1,000 563,839 259,537

3,896,830 2,232,124 (1,265,499) 1,155,927 6,019,382 1,349,605

- - - (63,000) (63,000) (5,290)

- - - (63,000) (63,000) (5,290)

873,080 232,070 - - 1,105,150 - (1,395,866) (1,152,365) - - (2,548,231) (688,256)

- - - - - 108,263 Contributed capital 51,673 7,938 - - 59,611 -

(1,320,000) (435,000) - (754,687) (2,509,687) (348,059) (470,055) (271,323) - (80,393) (821,771) (19,426)

(2,261,168) (1,618,680) - (835,080) (4,714,928) (947,478)

274,792 230,282 29,798 13,670 548,542 256,114

1,910,454 843,726 (1,235,701) 271,517 1,789,996 652,951

19,736,719 16,664,657 2,778,538 966,044 40,145,958 19,217,083

21,647,173$ 17,508,383$ 1,542,837$ 1,237,561$ 41,935,954$ 19,870,034$

983,289$ 1,405,987$ (1,045,672)$ 297,154$ 1,640,758$ 220,535$

2,778,605 505,728 8,390 843,967 4,136,690 1,271,223

(28,037) (229,810) (63,115) 1,242 (319,720) (63,600) Due from other governments (373,962) (5,673) - - (379,635) - Prepaid expenses - - (28,730) - (28,730) (27,525)

(61,457) 105,537 (270,728) (369) (227,017) (209,505) 54,561 9,093 (4,756) (227) 58,671 31,046

- - - - - 60,000 561,093 491,642 307,125 18,559 1,378,419 675 (17,262) (50,380) 48,551 (7,544) (26,635) (5,401)

- - - (782) (782) 65,500 - - (216,564) 3,927 (212,637) -

Inventory - - - - - 6,657

3,896,830$ 2,232,124$ (1,265,499)$ 1,155,927$ 6,019,382$ 1,349,605$

51,673$ 7,938$ -$ -$ 59,611$ 6,958$

City of Springfield, OregonPROPRIETARY FUNDS

STATEMENT OF CASH FLOWSYear Ended June 30, 2018

Business type activities - Enterprise Funds

Cash paid for employee services Cash received from customers

Cash flows from operating activities:

Noncash capital and related financing activities:

Cash flows from noncapital financing activities:

Cash flows from capital and related financing activities:

Cash flows from investing activities:

Net change in cash and investments

Cash and investments, beginning of year

Interest paid on long-term debt

Interest received

net cash provided by (used in) operating activities:

Net cash provided by (used in) operating activities

Cash paid to suppliers for goods and services Other operating receipts


Unearned revenue

Net cash provided by (used in) operating activities

Contributed capital assets

Deposits

Cash and investments, end of year

Reconciliation of operating income (loss) to

Operating income (loss) Adjustments to reconcile operating income (loss) to

Accrued payroll and other liabilities Accrued claims liabilities

Transfers to other funds Net cash provided (used) by noncapital

Net cash used in capital and related

Accounts receivable

financing activities

financing activities

Changes in assets and liabilities: Depreciation

Principal paid on long-term debt

System development chargesAcquisition and construction of capital assets Disposition of capital assets

Net OPEB obligation and related deferrals

Accounts payable

net cash provided by (used in) operating activities:

Net pension liability and related deferrals

64


STATEMENT OF FIDUCIARY NET POSITIONAGENCY FUND

June 30, 2018

ASSETS

Cash and investments 89,741,230$

LIABILITIES

Amounts held for other parties 89,741,230$


65


NOTES TO FINANCIAL STATEMENTS


NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the City of Springfield (City) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards. The more significant accounting policies of the City are described below. 1. Financial Reporting Entity The accompanying financial statements present the City of Springfield and its component unit. BLENDED COMPONENT UNIT The Springfield Economic Development Agency (SEDA) is a legally separate body, acting as the Urban Renewal Agency of the City of Springfield. Because the SEDA governing body is substantively the same as the City’s, and because City management is responsible for the Agency’s operations, the funds of the Agency are blended with those of the City by including them in the appropriate statements and schedules of this Comprehensive Annual Financial Report. Separate financial statements for the Agency can be obtained from the Finance Department of the City of Springfield or viewed on the City’s website at www.springfield-or.gov. 2. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the City and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on charges for services for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. 3. Measurement Focus, Basis of Accounting and Financial Statement Presentation Measurement focus refers to what is being measured by a fund. Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements.

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http://www.springfield-or.gov/




NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued The government-wide and proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 30 days of the end of the year being reported. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise fees, transient room taxes, and state shared revenues associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current period when collected within 30 days following the year end. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. All other revenue items are considered to be measurable and available only when cash is received. The fiduciary fund reported by the City, the Agency Fund, has no measurement focus and is reported on the full accrual basis of accounting. The financial transactions of the City are recorded in individual funds. Each fund is accounted for by providing a separate set of self-balancing accounts that comprise its assets, deferred outflows, liabilities, deferred inflows, fund equity, revenues, and expenditures/expenses. The various funds are reported by generic classification within the financial statements. There are stated minimum criteria for the determination of major funds: percentage of the assets plus deferred outflows, liabilities plus deferred inflows, revenues or expenditures/expenses of either fund category, or the governmental and enterprise funds combined. The City electively added funds as major funds, those funds which either had debt outstanding or specific community focus. Non-major funds are combined in a column in the fund financial statements and detailed in the combining section. The City reports the following major governmental funds: The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general

government, except those required to be accounted for in another fund.

The Street Fund accounts for revenues from state gasoline taxes apportioned from the State of Oregon and expenditures as specified under Article IX, Section 3 of the constitution of the State of Oregon.

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NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

The Police Levy Fund accounts for revenue received from a five-year Police Local Option Levy to enhance public safety services by adding staff to the Police and Court Departments as well as funding jail operations.

The City reports the following major proprietary funds: The Ambulance Fund accounts for the City’s ambulance operations. Revenue is derived mainly from

ambulance fees. The fund also performs billing and collection of ambulance operations for other Oregon cities. This service is provided for a fee.

The Sewer Fund accounts for the operation, construction, and maintenance of the wastewater collection

system. Revenue is derived from sewer user fees and system development charges. The Storm Drainage Fund accounts for operation, construction, and maintenance of the stormwater

drainage system. Revenue is derived from storm drainage fees and system development charges. Additionally, the government reports the following fund types: Internal Service funds account for the ownership and use of rolling stock and computer equipment, the

City’s risk and employee benefit program, and costs related to the administration of system development charges. Resources are provided by charges to other funds, including discretely presented component units.

The Agency Fund is a fiduciary fund used to account for funds received and held by the City in a custodial

capacity. The majority of the activity in this fund is made up of transactions related to being the fiscal agent for the Metropolitan Wastewater Management Commission and Regional Fiber Consortium, Ambulance billing fees collected for other agencies, Health Reimbursement Accounts held on behalf of City employees, and fees collected by the municipal court that are passed on to other entities and government agencies.

As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule include interfund services provided and/or used. Interfund services provided and/or used are accounted for as revenues and expenses since the elimination of such revenues and expenses would distort the direct costs and program revenues reported for the various functions. Accounts recorded as program revenues include charges to customers, operating grants and contributions, and capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the Ambulance Fund are ambulance fees and billing and collection charges. The principal operating revenues of the Booth-Kelly Fund are lease revenues. The principal operating revenues of the Sewer Fund are sewer user fees. The principal operating revenues of the Storm Drainage Fund are drainage fees. The principal operating revenues of the internal service

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NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued funds are charges to other funds for depreciation on equipment and for services provided. Operating expenses for the enterprise funds and internal service funds include administrative expenses, depreciation on capital assets and the cost of providing services. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City’s practice to use restricted resources first, then unrestricted resources as they are needed. 4. Assets, Liabilities, and Net Position or Equity a. Cash and Investments State statutes authorize the City to invest in obligations of the U.S. Treasury and its agencies, bankers’ acceptances, high grade commercial paper, the State of Oregon Local Government Investment Pool and repurchase agreements. Investments are reported at fair value. For purposes of the statement of cash flows for proprietary fund types, cash and investments in the City-wide investment pool (including restricted cash and investments) are considered cash and cash equivalents. The pool has the general characteristics of a demand deposit account in that funds may deposit additional cash at any time and may withdraw cash at any time without prior notice or penalty. b. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” Advances between funds, as reported in the fund financial statements, are offset by a nonspendable fund balance in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. Real and personal property taxes attach as an enforceable lien on property as of July 1st. All taxes are levied as of July 1st and are payable in three installments on November 15th, February 15th, and May 15th. All property taxes are billed and collected by Lane County, Oregon and then turned over to the City. For the year ended June 30, 2018, the City’s tax levy did not exceed the Oregon constitutional limitation. The total property tax levy was $32,510,580. This includes general property taxes to support general obligation bond debt service of $1,861,282.

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NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued The City has foreclosed on properties, collateralizing assessments receivable over the past twenty years. The properties collateralizing the assessments receivable, where the right to redemption still exists by the benefited property owner, are recorded as liens receivable, which include the cost of the original assessment, foreclosure costs and interest to the date of foreclosure, as provided by Oregon Statutes. Once the right to redeem these properties no longer exists (after one year), the properties are deeded to the City and then become investment in foreclosed property. Liens receivable and investment in foreclosed property are offset by unavailable revenue and, accordingly, have not been recorded as revenue in the governmental funds. The value of these properties, both liens and investment in foreclosed property, has been adjusted to the lower of net realizable value or cost. Net realizable value for the City has been determined by reviewing the true cash value of these properties as recorded by the Lane County assessor, less the underlying property taxes that must be paid upon the sale of the property by the City. c. Inventory Inventories of materials and supplies are valued at cost or average cost using the first-in/first-out method and are shown on the balance sheet as an asset with a corresponding nonspendable fund balance. Inventories are charged to operations as consumed in both the government-wide and fund financial statements. d. Prepaid Items Payments made to vendors for services that will benefit periods beyond June 30, 2018 are recorded as prepaid items. These prepaid amounts are recorded in the balance sheet as an asset with a corresponding nonspendable fund balance and are shown as expenditures in the periods that the service is provided, consistent with the “consumption method” of accounting for prepaids. e. Restricted Assets Assets whose use is restricted for construction, debt service or other purposes by provisions of grants, bond indentures or other agreements are segregated on the statement of net position. f. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, multi-use paths and traffic control devices), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 and an estimated useful life greater than one year. Such assets are recorded at historical cost, or estimated historical cost if actual historical cost is not available. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value. As permitted by GAAP, the City has limited the retroactive capitalization of governmental fund infrastructure to fiscal years ending after June 30, 1980. Although the majority of such infrastructure was placed in service before that date, it has not been included in these financial statements since it has been substantially depreciated.

70




NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Depreciation and amortization of capital assets are computed on the straight-line method over the estimated useful lives of the related assets. Upon disposal of such assets, the accounts are relieved of the related historical costs and accumulated depreciation, and resulting gains or losses are reflected in income. The estimated useful lives of the various categories of assets are as follows: Interest is capitalized on proprietary fund assets acquired with tax-exempt debt. The amount of interest to be capitalized is calculated by offsetting interest expense incurred from the date of the borrowing until completion of the project with interest earned on invested proceeds over the same period. g. Compensated Absences It is the City’s policy to permit employees to accumulate earned but unused vacation leave within limits set by collective bargaining agreements. All employees with accrued vacation leave are paid the outstanding vacation accrual balance, within limits, at separation at the employees current pay rate. Employees with sick leave accruals and meeting longevity requirements are paid the outstanding sick leave accrual balance, within limits, upon retirement at the employees current pay rate. All vacation and sick leave pay is accrued when incurred in the government-wide and proprietary fund statements. The governmental fund financial statements do not report liabilities for compensated absences unless they are due for payment. The General Fund is the governmental fund that will be primarily used to liquidate compensated absences based on the high level of staffing that is funded from this fund. h. Long-term Liabilities In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are recognized in the year incurred. Deferred charges for refunding are amortized straight-line over the life of the new debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts as well as bond issuance costs during the current period. The face amount of debt issued is reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Category Estimated Useful Life Buildings 10-50 years Equipment 3-20 years Infrastructure 20-50 years Studies 20 years

71




NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued i. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The other instance of deferred inflows arises only under a modified accrual basis of accounting. Accordingly, unavailable revenue is reported only in the governmental funds balance sheet. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. j. Pensions Oregon Public Employees Retirement System (OPERS) – For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the OPERS and additions to/deductions from OPERS’s fiduciary net position have been determined on the same basis as they are reported by OPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. City Retirement Plan (CRP) – For purposes of measuring the net pension liability and pension expense, information about the fiduciary net position of CRP and additions to/deductions from CRP fiduciary net position have been determined on the same basis as they are reported by the City’s actuary. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. k. Fund Balance In the fund financial statements, the fund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Fund balance is reported as nonspendable when the resources cannot be spent because they are either in a nonspendable form or legally or contractually required to be maintained intact. Resources in nonspendable form include inventories, prepaids, and assets held for resale. Fund balance is reported as restricted when the constraints placed on the use of resources are either (a) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation.

72




NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued Fund balance is reported as committed when the City Council passes a resolution that places specific constraints on how the resources may be used. The City Council can modify or rescind the commitment at any time through passage of an additional resolution. Resources that are constrained by the City’s intent to use them for a specific purpose, but are neither restricted nor committed, are reported as assigned fund balance. Intent is expressed when the City Council approves which resources should be “reserved” during adoption of the annual budget. The City’s Finance Director uses that information to determine whether those resources should be classified as assigned or unassigned for presentation in the City’s Annual Financial Report. Unassigned fund balance is the residual classification for the General Fund. This classification represents fund balance that has not been restricted, committed, or assigned within the General Fund. This classification is also used to report any negative fund balance amounts in other governmental funds. When both restricted and unrestricted (committed, assigned, or unassigned) resources are available for use, it is the City’s practice to use restricted resources first, then unrestricted resources as needed. When an expenditure is incurred where an unrestricted fund balance classification could be used, the City’s practice is to use committed resources first, assigned resources second, and then unassigned amounts as they are needed. Fund balances by classification for the year ended June 30, 2018 were as follows:

TotalPolice Nonmajor Governmental

Fund Balances General Street Levy Governmental Funds

Nonspendable:

Inventories 2,775$ 242,982$ -$ -$ 245,757$

Prepaids 59,663 - - 1,016 60,679

Investment in foreclosed property 1,970 - - - 1,970

Restricted:

Debt service - - - 382,512 382,512

Urban renewal - - - 6,262,175 6,262,175

Capital projects - - - 1,595,284 1,595,284

Street repairs and maintenance - 1,676,900 - - 1,676,900

Transportation - - - - -

Street improvements - - - 2,996,261 2,996,261

Public Safety - Fire - - - 439,575 439,575

Public Safety - Police general - - 1,186,523 179,749 1,366,272

Public Safety - Police forfeitures - - - 490,230 490,230

Building code - - - 2,289,989 2,289,989

Economic development - - - 1,360,914 1,360,914

Library services - - - 13,441 13,441

Committed:

Development assessment - - - 532,569 532,569

Capital projects - - - 1,668,173 1,668,173

Technology fee reserve 293,004 - - - 293,004

Assigned:

Capital projects - - - 484,533 484,533 Contigency reserve 1,000,000 - - - 1,000,000 Public Safety - Police K9 - - - 85,480 85,480 Public Saftey - Police general 148,189 148,189 Other purposes - - - 201,874 201,874

Unassigned 8,388,052 - - - 8,388,052

Total fund balances 9,745,464$ 1,919,882$ 1,186,523$ 19,131,964$ 31,983,833$

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NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued l. Indirect Expenses Allocation In the government-wide statement of activities, program costs include incidental indirect costs. m. Contingency and Working Capital Policy The City will maintain adequate cash reserves for both contingencies and working capital. Each fund will maintain adequate cash reserves, borrow internally from another City fund, or as a last resort, borrow externally to provide for cash flow and contingency requirements. 5. New Accounting Pronouncements During the fiscal year ended June 30, 2018, the City implemented the following GASB pronouncements: • GASB Statement No. 75 – Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The purpose of this Statement is to establish standards of accounting and financial reporting, but not funding or budgetary standards, for OPEB that is provided to the employees of state and local governmental employers through OPEB Plans that are administered through trusts or equivalent arrangements meeting certain criteria. This statement also establishes standards for recognizing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditure. It replaces the requirements of Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, as amended, and No. 57, OPEB Measurement by Agent Employers and Agent Multiple-Employer Plans. The adoption of Statement No. 75 had no impact on the City’s governmental fund financial statements. However, the adoption has resulted in the restatement of the City’s Fiscal Year 2017 government-wide financial statements and proprietary funds financial statements to reflect the reporting of total OPEB liabilities, deferred inflows of resources, deferred outflows of resources and the recognition of OPEB expense in accordance with the provisions of the Statement. See Note O (Other Post-employment Benefits) in the Notes to Basic Financial Statements section of this report for additional information. • GASB Statement No. 81, Irrevocable Split-Interest Agreements. The Statement requires that a government that receives resources pursuant to an irrevocable split-interest agreement recognizes assets, liabilities, and deferred inflows of resources at the inception of the agreement. GASB 81 also provides expanded guidance for circumstances in which the government holds the assets. As a result, there is no impact in the current year as a result of the application of this standard. • GASB Statement No. 85, Omnibus 2017. The objective of this Statement is to address practice issues that have been identified during implementation and application of certain GASB Statements. This Statement addresses a variety of topics including issues related to blending component units, goodwill, fair value measurement and application, and postemployment benefits (pensions and other postemployment benefits [OPEB]). • GASB Statement No. 86, Certain Debt Extinguishment Issues. The primary objective of this Statement is to improve consistency in accounting and financial reporting for in-substance defeasance of debt by providing guidance for transactions in which cash and other monetary assets acquired with only existing resources – resources

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NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued other than the proceeds of refunding debt – are placed in an irrevocable trust for the sole purpose of extinguishing debt. This Statement also improves accounting and financial reporting for prepaid insurance on debt that is extinguished and notes to financial statements for debt that is defeased in substance. As a result, there is no impact in the current year as a result of the application of this Statement. • GASB Statement No. 89 – Accounting for Interest Cost Incurred before the End of a Construction Period. This Statement requires that interest cost incurred before the end of a construction period be recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus. As a result, interest cost incurred before the end of a construction period will not be included in the historical cost of a capital asset reported in a business-type activity or enterprise fund. This Statement also reiterates that in financial statements prepared using the current financial resources measurement focus, interest cost incurred before the end of a construction period should be recognized as an expenditure on a basis consistent with governmental fund accounting principles. There is no impact in the current year as a result of the application of this Statement. • GASB Statements No. 83, 84, 87, 88, and 90 – These are other pronouncements that have been issued by the GASB but not yet implemented by the City. NOTE B – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS 1. Explanation of certain differences between the governmental fund balance sheet and the government-wide statement of net position. The governmental fund balance sheet includes a reconciliation between fund balance – total governmental funds and net position – governmental activities as reported in the government-wide statement of net position. One element of that reconciliation explains that “all liabilities are reported in the statement of net position, however if they are not due and payable in the current period, they are not recorded in the governmental funds.” The details of this $62,971,700 difference are as follows:

Bonds payable, net of original issue premium and deferred charges 14,638,575$ Notes payable 4,296,965 Interfund loan payable 1,166,022 Due to developer 210,000 Accrued interest payable 38,980 Compensated absences 4,512,088 Net pension liability and related deferrals 32,322,836 Net OPEB obligation 5,786,234

Total 62,971,700$

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NOTE B – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS – Continued Another element of that reconciliation states that “capital assets are not financial resources in governmental funds, but are reported in the statement of net position at their net depreciable value.” The details of this $129,602,555 are as follows:

2. Explanation of certain differences between the governmental fund statement of revenues, expenditures, and changes in fund balances and the government-wide statement of activities. The governmental fund statement of revenues, expenditures, and changes in fund balances includes reconciliation between net changes in fund balances – total governmental funds and changes in net position of government activities as reported in the government-wide statement of activities. One element of that reconciliation explains that “Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.” The details of this $(3,297,405) difference are as follows:

Another element of that reconciliation states that “the issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities.” The details of this $(1,239,579) difference are as follows:

Capital assets (net of accumulated depreciation) reported in the Statement of Net Position - governmental activities column: Land and work in progress 70,114,228$ Other capital assets (net of accumulated depreciation) 65,351,039 Total capital assets reported in internal service funds included in the Statement ofNet Position - governmental activities column (net of accumulated depreciation): (5,862,712)

129,602,555$

Capital outlay 996,405$ Donated capital assets 784,562 Depreciation (5,078,372) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities (3,297,405)$

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NOTE B – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS – Continued

Another element of the reconciliation states that “governmental funds do not report expenditures for unpaid compensated absences or other post-employment benefits since they do not use current financial resources.” The details of this $(2,382,295) difference are as follows:

NOTE C – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY The City follows these procedures in establishing the budgetary data reflected in the financial statements. In April of each year, the City Manager submits a recommended budget to the Budget Committee (which consists of the City Council and an equal number of citizens of the City). The City’s budget is prepared for each fund on the modified accrual basis of accounting. Estimated receipts and expenditures are budgeted for by fund, program and object. Information on the past two year’s actual receipts and expenditures and current-year amended budgets are included in the budget document. The Budget Committee conducts public hearings for the purpose of obtaining citizens’ comments. The Budget Committee then presents an approved budget to the City Council for final adoption. The adopted expenditures for each fund may not be increased by more than 10% during the year without a special public hearing of the governing body with notice to the citizens published 5 to 30 days in advance. After the Council adopts the budget and certifies the total of ad valorem taxes to be levied, no additional tax levy may be made for that fiscal year. The City Council legally adopts the budget before July 1, by resolution. The resolution authorizes fund appropriations as current annual departmental requirements, debt service, capital projects, interfund transfers, interfund loans, statutory payments, contingencies, unappropriated fund balances and reserves. Expenditures cannot legally exceed appropriations at these control levels. Appropriations lapse as of the end of the year.

Issuance of note payable (2,729,248)$ Principal repayment of general obligation debt 1,390,000 Principal repayment of note payable 305,530 Amortization of deferred charges (35,034) Amortization of bond premiums 230,481 Increase in interfund loan payable (415,353) Decrease in accrued interest payable 14,045 Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities (1,239,579)$

Increase in accrued compensated absences (175,530)$ Increase in net pension liability and related deferrals (2,477,020) Decrease in net OPEB obligation 270,255 Net adjust to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities (2,382,295)$

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NOTE C – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY – Continued The City Council may change the budget throughout the year by transferring appropriations between levels of control and by adopting supplemental budgets as authorized by Oregon Revised statutes. Management may administratively transfer budget amounts between individual line items within the control level, but cannot make changes between the legal levels of control. During the fiscal year ended June 30, 2018, the City Council approved several transfer resolutions and supplemental budgets increasing appropriations by $8,525,074. The Ambulance Fund reported a negative fund balance of $1,450,487. This negative fund balance was the result of the Fund not receiving the anticipated ambulance billing revenue in the current and prior fiscal year. NOTE D – CASH AND INVESTMENTS The City of Springfield maintains a common cash and investment pool that is available for use by all funds. At June 30, 2018, cash and investments are comprised of the following:

Cash on Hand $ 5,371 Cash with Fiscal Agent 5,500 Deposits 4,777,037 Local Government Investment Pool Accounts 70,988,582 Investments 108,456,319

$ 184,232,809 Each fund’s portion of this pool is displayed in the Statement of Net Position. Deposits Deposits with financial institutions are comprised of checking and money market accounts. As of June 30, 2018, the City of Springfield had a book balance of $4,777,037 and a bank balance of $5,329,010. The difference is due to transactions in process. Of this amount, $750,000 was covered by federal depository insurance, and the remainder was collateralized by the statewide pool. Effective July 1, 2008, the State of Oregon formed the Oregon Public Funds Collateralization Program under ORS 295. The collateralization program creates a statewide pool of qualified bank depositories for local governments, providing collateralization for bank balances that exceed the limits of federal depository insurance,

Governmental Funds $ 52,555,624 Business-type Funds 41,935,955 Not Appearing on Statement of Net Position Fiduciary Fund 89,741,230

$ 184,232,809

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NOTE D – CASH AND INVESTMENTS - Continued and eliminating the need for certificates of participation. The legislation creates a shared liability structure for depository banks, but does not guarantee that public funds are 100% protected. The City is also required to verify that amounts in excess of FDIC insurance limits are deposited only in qualified depository banks listed by the Office of the State Treasurer. Local Government Investment Pool The City participates in the State of Oregon Local Investment Pool (LGIP or Pool) which is an open-ended, load diversified portfolio created under ORS 294.805 to 294.895 and is not registered with the U.S. Securities and Exchange Commission as an investment company. Fair value of the LGIP is calculated at the same value as the number of shares owned. The unit of account is each share held, and the value of the position would be the fair value of the pool’s share price multiplied by the number of shares held. The State Treasurer is the investment officer for the Pool and is responsible for all funds in the Pool. These funds must be invested and managed, like that of a prudent investor, exercising reasonable care, skill, and caution. Investments in the funds are further governed by portfolio guidelines issued by the Oregon short-term Funds Board, which establish diversification percentages and specify the types of maturities of investments. The Oregon Audits Division of the Secretary of State’s Office audits the Pool annually. The Division’s report on the Pool as of and for the year ended June 30, 2018 was unmodified and may be obtained at the Oregon State Treasury, 350 Winter St. NE, Ste 100, Salem, OR 97310 or at www.ost.state.or.us. At June 30, 2018, the fair value of the City’s deposits with the LGIP approximates cost. Cash and Investments On June 30, 2018, the City of Springfield held $108,456,319 of investments; corporate indebtedness of $43,760,459, and government agency securities totaling $64,695,860. The City’s investment policy requires that the City diversify investments across maturities, security type, and institution to avoid incurring unreasonable risks. Specifically, except for the Local Government Investment Pool, no more than 25% of the City’s total investment portfolio will be invested with a single financial institution, no more than 20% of the total portfolio will be invested with any one security, and lastly, no more than 5% of the total portfolio will be invested with any one corporate entity. The City was in compliance with all of the above stated City investment policy guidelines. The City’s policy for custodial credit risk is outlined in the City’s Investment and Portfolio Policies, adopted by the City Council. This investment policy applies to all cash-related assets included within the scope of the City of Springfield’s audited financial statements and held directly by the City. Funds will be invested in compliance with the provisions of, but not necessarily limited to the Oregon Revised Statutes (ORS), Chapter 295, other applicable statutes and this policy. Investment of any tax exempt borrowings proceeds and any related debt service funds will comply with the arbitrage restrictions in all applicable Internal Revenue Service codes. The City will limit investment activities in order to ensure safety, legality, liquidity, diversity, and yield. The standard of prudence used by the City’s investment officer in the context of managing the overall portfolio shall be the prudent investor rule.

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http://www.ost.state.or.us/




NOTE D – CASH AND INVESTMENTS - Continued The scope of the City’s investment policy includes not only investments, but all cash-related assets included within the scope of the City of Springfield’s financial statements and held directly by the City. The investment policy establishes the City’s permitted investments and provides guidelines for managing the various types of risk associated with these investments. The different risks will be discussed below.

A. Interest rate risk

Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. City staff manages this risk by limiting the maturity of the investments held by the City. The investment policy requires that all short-term investments mature in less than 18 months. The investment policy defines short-term investments as those not reserved for specific capital projects or debt payments. Long-term investments are required to have maturities less than 3 years. Commercial paper is required to have a maturity which does not exceed 270 days. On June 30, 2018, 100% of the total investments were considered short-term and had maturities less than 18 months and none were considered long-term with maturities of more than 18 months but less than 3 years. The table below displays the liquidity requirements of the investment policy and the liquidity characteristics of the City’s cash and investments on June 30, 2018. Short-Term Investments:

B. Credit risk

Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligation. The City’s investment policy provides that all corporate debt securities be rated at a minimum of A1 or AA by Standard and Poor’s rating service or P1 or Aa by Moody’s rating service, or for an Oregon issuer, a minimum of A1 or A or better by S & P; or P1 or Aa by Moody’s. At June 30, 2018, all of the corporate debt in the City’s portfolio is in compliance with the investment policy. The Local Government Investment Pool is not rated and is not registered with the U.S. Securities and Exchange Commission.

C. Custodial credit risk

Custodial credit risk is the risk that, in the event of the failure of the counterparty to a transaction, the City will not be able to recover the value of an investment or collateral securities in the possession of an outside party. The City’s investment policy requires that broker/dealers meet certain qualifications and that purchased investment securities will be delivered by FED book entry, DTC, or physical delivery, and held in third party

Maturity Amount Actual % Investment Policy % Under 30 days $ 80,675,080 44% 10 % minimum Under 90 days 97,163,235 53% 25 % minimum Under 270 days 118,565,935 64% 50 % minimum Under one year 145,286,878 79% 80 % minimum Under 18 months 184,232,809 100% 100 % minimum

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NOTE D – CASH AND INVESTMENTS - Continued safekeeping - registered to the City of Springfield - with a designated custodian. All of the City’s investments at June 30, 2018 were delivered by book entry to the account of BNY Western Trust Company, who held the securities for the benefit of the City. D. Concentration of credit risk

Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s investment in a single issuer. The City’s investment policy provides concentration guidelines by both institution and by type of investment. The City diversifies investments across maturities, security type and institution to avoid incurring unreasonable risks. In particular, except for the Local Government Investment Pool, no more than 25% of the City’s total investment portfolio will be invested with a single financial institution. In addition, no more than 20% of the total portfolio will be invested with any one security and no more than 5% of the total portfolio will be invested with any one corporate entity. As of June 30, 2018, the City was in compliance with the City’s investment policy.

Diversification by Financial Instrument:

E. Fair Value Measurements

Fair value is defined as the price that would be received at the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The City categorizes fair value measurements within the hierarchy established by GASB Statement 72. This hierarchy defines three levels of inputs used to assess fair value which allows financial statement users to identify the level of reliability and determine variance risk between actual amounts received during a sale of assets or transfer of liabilities to that which is reported in the financial statements for the measurement date.

The classification of securities within this fair value hierarchy is based on activity level in the market for the security type, and the inputs used to determine their fair value as follows:

• Level 1 – Unadjusted quoted prices for identical instruments in active markets.

Maximum %Instrument Amount % Invested of Portfolio

State of Oregon Investment Pool 70,988,582$ 38% 100%Interest Bearing Checking Account 1,441,624 1% 50%Money Market Account 3,335,413 2% 50%Corporate Bonds 43,760,459 24% 25%Municipal Bonds 64,695,860 35% 50%Other 10,871 0% 0%

Totals 184,232,809$ 100%

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NOTE D – CASH AND INVESTMENTS - Continued

• Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable based on market data obtained from sources independent of the reporting entity.

• Level 3 – Valuations derived from valuation techniques in which significant inputs are unobservable (based on the best information available regarding assumptions market participants would use in pricing the asset).

As of June 30, 2018, the City’s investments in corporate and municipal bonds are classified as level 2. F. Foreign currency The City of Springfield has not made any investments that are not in US dollar denominations therefore the City is not exposed to this risk.

NOTE E – RECEIVABLES AND UNAVAILABLE REVENUE

Assessments, liens, and mortgage notes are collateralized by real estate.

Receivables at June 30, 2018 consist of the following:

PropertyTaxes and Assessments Accrued Mortgage SDC Deferred Total Net

Fund Other Accounts and Liens Grants Interest Notes Receivable Receivable

General 1,328,160$ 1,343,600$ -$ -$ 50,472$ -$ 1,234$ 2,723,466$ Street - 697,452 - - 2,950 - - 700,402 Police Levy 368,351 62,613 - - 6,975 - - 437,939 Sewer - 1,158,427 - - 71,239 - - 1,229,666 Storm Drainage - 1,324,173 - - 58,675 - - 1,382,848 Ambulance - 617,917 * - - 7,405 - - 625,322 Nonmajor governmental 447,795 338,530 79,717 140,750 60,658 1,746,485 644,418 3,458,353 Nonmajor enterprise - 69,837 - - 3,724 - - 73,561 Internal Service - 62,228 - - 66,972 - - 129,200

2,144,306$ 5,674,777$ 79,717$ 140,750$ 329,070$ 1,746,485$ 645,652$ 10,760,757$

*Net of allowances for uncollectible accounts totalling $954,900

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NOTE E – RECEIVABLES AND UNAVAILABLE REVENUE - Continued Mortgage notes within the Community Development fund are a result of loans made under the CDBG federal program. Repayment is dependent on the type of mortgage note. Deferred payment loans, housing improvement loans, and SHOP loans are due and payable at the time of sale or transfer of title. Most loans are interest free. In all cases, loans become immediately due and payable if the client fails to meet any contract requirements. Governmental funds report unavailable revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. At June 30, 2018, the various components of unavailable revenue (deferred inflows) consist of the following:

Property Mortgage Total taxes Fees and notes unavailable

FUND BY TYPE receivable charges receivable Assessments Other revenue

General 1,328,160$ 817,302$ -$ -$ -$ 2,145,462$ Street - 103,013 - - - 103,013 Police Levy 368,351 - - - 1,030 369,381 Nonmajor governmental 447,795 842,046 1,375,901 79,718 408,569 3,154,029

Total unavailable revenue 2,144,306$ 1,762,361$ 1,375,901$ 79,718$ 409,599$ 5,771,885$

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NOTE F – CAPITAL ASSETS

Governmental activities:Beginning EndingBalance Increases Decreases Balance

Capital assets, not being depreciated: Land 67,093,122$ 577,339$ (55,336)$ 67,615,125$ Work in progress 4,713,974 695,786 (2,910,657) 2,499,103

Total capital assets, not being depreciated 71,807,096 1,273,125 (2,965,993) 70,114,228

Capital assets, being depreciated: Buildings 48,447,227 98,325 - 48,545,552 Infrastructure 73,851,714 3,117,880 - 76,969,594 Machinery & equipment 23,762,026 956,845 (1,016,566) 23,702,305 Library books 1,998,269 - - 1,998,269 Studies 1,261,746 - (183,592) 1,078,154

Total capital assets, being depreciated 149,320,982 4,173,050 (1,200,158) 152,293,874

Less accumulated depreciation for: Buildings (25,227,370) (2,283,717) - (27,511,087) Infrastructure (37,339,894) (2,619,217) - (39,959,111) Machinery & equipment (16,386,803) (1,343,928) 897,551 (16,833,180) Library books (1,998,269) - - (1,998,269) Studies (722,046) (102,734) 183,592 (641,188)

Total depreciation (81,674,382) (6,349,596) 1,081,143 (86,942,835)

Total capital assets, being depreciated, net 67,646,600 (2,176,546) (119,015) 65,351,039

Governmental activities capital assets, net 139,453,696$ (903,421)$ (3,085,008)$ 135,465,267$

Business-type activities:Beginning EndingBalance Increases Decreases Balance

Capital assets, not being depreciated: Land 6,298,566$ 76,870$ -$ 6,375,436$ Work in progress 2,534,888 991,348 (2,887,434) 638,802

Total capital assets, not being depreciated 8,833,454 1,068,218 (2,887,434) 7,014,238

Capital assets, being depreciated: Buildings & infrastructure 107,126,666 4,346,850 - 111,473,516 Land improvements 532,806 - - 532,806 Equipment 2,118,325 - - 2,118,325 Studies 1,851,857 20,599 - 1,872,456

Total capital assets, being depreciated 111,629,654 4,367,449 - 115,997,103

Less accumulated depreciation for: Land improvements (511,247) (1,243) - (512,490) Buildings & infrastructure (37,919,177) (3,804,674) - (41,723,851) Equipment (1,474,782) (197,459) - (1,672,241) Studies (1,137,954) (133,316) - (1,271,270)

Total depreciation (41,043,160) (4,136,692) - (45,179,852)

Total capital assets, being depreciated, net 70,586,494 230,757 - 70,817,251

Business-type activities capital assets, net 79,419,948$ 1,298,975$ (2,887,434)$ 77,831,489$

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NOTE F – CAPITAL ASSETS – Continued Depreciation expense was charged to functions of the City as follows:

Governmental activities: General government $ 92,542 Police 1,985,642 Fire and life safety 724,596 Development and public works 3,276,051 Library 20,330 Unallocated 250,435 Total depreciation expense – governmental activities $ 6,349,596 Business-type activities:

Sewer $ 2,778,606 Storm 505,728 Booth-Kelly 843,968 Ambulance 8,390 Total depreciation expense – business type activities $ 4,136,692

NOTE G - RISK MANAGEMENT The City is exposed to various risks of loss related to torts, errors and omissions, loss or damage to assets, employee injury or illness, and natural disasters. The City maintains professional risk management and health and wellness programs. Various loss-control techniques are used to minimize or prevent losses. These techniques and programs include but are not limited to: contracting for risk and benefit broker services, contracting for legal services, operation of a wellness clinic, accident investigation and training, fleet management, verification of employee qualifications, and employee and supervisory training. The City has established an internal service fund to account for and finance its risks of loss. The City maintains a self-insured health benefit program that provides medical, dental, and vision coverage to all regular full and part-time employees and their dependents as well as non-Medicare eligible retirees and their dependents. The City has established a self-insurance reserve to pay medical, dental, and vision claims up to the self-insurance retention limit of $150,000 per covered individual.

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NOTE G - RISK MANAGEMENT – Continued The following changes occurred in the health and dental claims liability in the current and previous fiscal years:

The City of Springfield is self-insured for workers’ compensation. The City estimates liability for incurred losses for reported and unreported claims for worker’s compensation. Workers’ compensation estimates are primarily based on individual case estimates for reported claims and through historical data for unreported claims as determined by the City’s Risk Management Services and independent actuarial studies. Liabilities are based on estimated ultimate cost of settling claims, including effects of inflation and other societal and economic factors.

The City purchases third-party coverage or is part of the City County Insurance Services Insurance Pool for all lines of coverage. These include but are not limited to personal injury, public officials’ errors and omissions, automobile, employer’s liability, and property. Settled claims have not exceeded insurance coverage in any of the past five fiscal years.

Liability Current yearFiscal balance at claims and Liability

year ended beginning changes in Claim balance atJune 30 of year estimates Payments end of year

2013 -$ 2,256,826$ (1,791,735)$ 465,091$ 2014 465,091 4,894,984 (4,960,500) 399,575 2015 399,575 6,007,389 (5,359,049) 1,047,915 2016 1,047,915 5,343,218 (5,895,677) 495,456 2017 495,456 5,771,608 (5,531,337) 735,727 2018 735,727 6,293,791 (6,292,611) 736,907

IBNR & NetCase IBNR Outstanding Closeout LCF after Outstanding

Year Reserves Reserves LCF Risk Adj. Closeout LiabilitiesPrior 30,319$ -$ -$ -$ -$ 30,319$

2012-13 - - - - - - 2013-14 - - - - - - 2014-15 97,368 22,358 23,945 13,663 - 157,334 2015-16 - 52,277 10,455 3,943 - 66,675 2016-17 51,402 59,938 22,268 5,795 - 139,403 2017-18 129,618 135,586 53,041 5,991 324,236

Total 308,707$ 270,159$ 109,709$ 29,392$ -$ 717,967

Less investment income offset (9,967)

Net accrued claims liability 708,000$

Self-Insured Workers' Compensation ProgramEstimated Liability for Unpaid Loss and LAE at June 30, 2018

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NOTE H - CAPITAL LEASES The City purchased equipment in the fiscal year ending June 30, 2013 for $977,780 with no down payment and annual payments over 5 years. The City purchased equipment in the fiscal year ending June 30, 2016 for $125,452 with no down payment and annual payments over 5 years. The City purchased equipment in the fiscal year ending June 30, 2017 for $593,108 with no down payment and annual payments over 5 years. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of the inception date.

NOTE I - LONG-TERM DEBT General Obligation Bonds The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds are backed by the full faith and credit of the City and are serviced by general property tax revenues. The original amount of general obligation bonds issued in prior years was $14,690,000. General obligation bonds payable transactions for the year ended June 30, 2018 are as follows:

The assets acquired through capital leases are as follows:

Machinery and equipment 1,696,340$ Less: Accumulated depreciation (502,417) Total 1,193,923$

The future minimum lease obligations as of June 30, 2018, are as follows:

Fiscal Year Ending June 30, Principal Interest2019 143,635$ 10,247$ 2020 146,970 6,912 2021 150,385 3,496 Totals 440,990$ 20,655$

Final Effective Outstanding OutstandingIssue Maturity Interest July 1, Issued Retired June 30, Due WithinDate Date Rate 2017 During year During Year 2018 One Year

Series 2016 6/29/2016 2026 1.36% 14,465,000$ -$ (1,390,000)$ 13,075,000$ 1,445,000$

Unamortized premium 1,843,847 Due in current year (1,445,000)

Total general obligation long-term debt 13,473,847$

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NOTE I - LONG-TERM DEBT – Continued Revenue Bonds The City issues revenue bonds to finance major construction projects in business-type activities. Revenue bonds are secured and serviced by system revenues. The original amount of revenue bonds issued in prior years was $23,610,000. The City has committed to establish utility user charges sufficient to pay principal and interest when due. If user charges are not sufficient, the City is required by covenant to raise utility rates sufficient to pay maturing principal and interest. Debt service on the revenue bonds is paid solely from user fees. Revenue obligation bonds payable transactions for the year ended June 30, 2018 are as follows:

Maturities of bond principal and interest are as follows:

Final Effective Outstanding OutstandingIssue Maturity Interest July 1, Issued Retired June 30, Due WithinDate Date Rate 2017 During year During Year 2018 One Year

Series 2010 10/6/2010 2030 3.149% 7,650,000$ -$ (435,000)$ 7,215,000$ 450,000$

Series 2017 6/27/2017 2027 1.725% 13,610,000 - (1,320,000) 12,290,000 1,245,000

Unamortized premium 1,685,522 Due in current year (1,695,000)

Total revenue bonds payable 19,495,522$

Year Principal Interest Principal Interest Principal Interest

2018-19 1,445,000$ 523,000$ 1,695,000$ 724,400$ 3,140,000$ 1,247,400$ 2019-20 1,505,000 465,200 1,740,000 673,400 3,245,000 1,138,600 2020-21 1,570,000 405,000 1,795,000 620,975 3,365,000 1,025,975 2021-22 1,625,000 342,200 1,860,000 553,700 3,485,000 895,900 2022-23 1,695,000 277,200 1,930,000 483,975 3,625,000 761,175 2023-28 5,235,000 413,800 8,490,000 1,231,000 13,725,000 1,644,800 2028-31 - - 1,995,000 121,700 1,995,000 121,700

Total 13,075,000$ 2,426,400$ 19,505,000$ 4,409,150$ 32,580,000$ 6,835,550$

General Obligation Bonds Revenue Bonds Total

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NOTE I - LONG-TERM DEBT – Continued The City issues debt backed solely by future fees received for certain services. At June 30, 2018, future pledged revenues are as follows:

Approx %Future pledged of future revenues Revenue, net of

Year end of revenue debt pledged to related expenses Debt payments Purpose Revenue Stream final payments outstanding gross revenues Y/E 6/30/2018 Y/E 6/30/2018

Revenue bonds:Sewer System series 2017 Sewer system fees 2027 14,735,750$ 11.0% 7,228,135$ * 1,705,084$

Revenue bonds:Storm System series 2010 Sewer system fees 2030 9,178,400 4.5% 7,228,135 * 706,325

Business -type activities 23,914,150$ 2,411,409$

* same revenue source pledged for two purposes

Notes Payable

At June 30, 2018 notes payable are as follows:

Governmental activites:

Bank of Cascades (SEDA), payable in monthly installments including interest at 3.08%, due 2024 1,625,548$

Bank of Cascades (SEDA), payable in monthly installments including interest at 4.15%, due 2025 2,671,417

Total governmental activities 4,296,965$

Business-type activities:

Bank of the West (BLM), Note payable with monthly installments beginning June, 2009 at 6.97%, due in May of 2019 739,418$

Total business-type activities 739,418$

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NOTE I - LONG-TERM DEBT – Continued Principal amounts due on these notes payable in each of the next six years and thereafter are as follows:

Beginning in 2004, the City entered into an initial agreement with the US Bureau of Land Management (USBLM) to finance their portion of the construction of a shared facility constructed by the Oregon Department of Military. In 2006, the City secured a $6.4 million construction loan from the Bank of the West and construction began. The building was completed in the 2009 fiscal year and the construction loan was converted into a ten-year conventional loan with remaining loan proceeds used to reduce the new loan balance to $6 million. The USBLM’s portion of the building was capitalized by the City and is being depreciated over ten years on the straight-line method. The USBLM will make lease payments to the City equal to the City’s debt service payments. Per the terms of the loan agreement with the Bank of the West, the City is under no obligation to make debt service payments above the lease payments received by the USBLM. At the end of ten years, the capital asset and related loan will be fully depreciated and repaid, and the building transferred to the Oregon Department of Military. The contract payable represents an amount due to Sycan B Corporation for a land purchase, with a due date to be established by mutual agreement of both parties.

Governmental Business-typeFiscal Year Activities Activities

2018-19 527,682$ 739,418$ 2019-20 596,380 - 2020-21 619,164 - 2021-22 642,584 - 2022-23 666,908 - 2023-25 1,244,247 - .

4,296,965$ 739,418$

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NOTE I - LONG-TERM DEBT – Continued Changes in Long-term Liabilities

Long-term liability activity for the year ended June 30, 2018 was as follows:

Beginning Ending Due WithinBalance Additions Reductions Balance One Year

Governmental activities

General obligation bonds 14,465,000$ -$ (1,390,000)$ 13,075,000$ 1,445,000$ Less deferred amounts for issuance premiums 2,074,327 - (230,480) 1,843,847 -

Total bonds payable 16,539,327 - (1,620,480) 14,918,847 1,445,000

Notes payable 1,873,246 2,729,249 (305,530) 4,296,965 527,682 Deferred system development fees 750,668 415,354 - 1,166,022 - Contracts payable 210,000 - - 210,000 - Capital leases 789,049 - (348,059) 440,990 143,634 Accrued claims liability 648,000 - (12,000) 708,000 227,722 Compensated absences 4,355,635 1,408,376 (1,234,877) 4,529,134 1,296,675 OPEB obligation 5,262,439 614,037 - 5,876,476 - Net pension liability 45,056,647 - (3,326,121) 41,730,526 - Governmental activity long-term liabilities 75,485,011$ 5,167,016$ (6,847,067)$ 73,876,960$ 3,640,713$

Business-type activities:

Bonds payable: Revenue bonds 21,260,000$ -$ (1,755,000)$ 19,505,000$ 1,695,000$ Less deferred amounts for issuance premiums 1,863,478 - (177,956) 1,685,522 -

Total bonds payable 23,123,478 - (1,932,956) 21,190,522 1,695,000

Notes payable 1,494,105 - (754,687) 739,418 739,418 Compensated absences 902,170 365,750 (304,164) 963,756 320,637 OPEB obligation 1,297,521 113,668 - 1,411,189 - Net pension liability 9,766,126 - (86,829) 9,679,297 - Business-type activities long-term liabilities 36,583,400$ 479,418$ (3,078,636)$ 33,984,182$ 2,755,055$

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NOTE J – RECEIVABLES AND PAYABLES WITHIN THE REPORTING ENTITY Interfund Payables & Receivables

Receivable Fund Payable Fund Amount Sewer Internal service funds $ 42,236 Storm Drainage Internal service funds 32,036 Booth Kelly Internal service funds 22,215 Ambulance Internal service funds 52,912 Total due to/from other funds (different fund types) $ 149,399

The balances shown above are for services rendered and are generally paid within 30 days. In an effort to encourage development within the two urban renewal districts, the Springfield Economic Development Agency (SEDA) implemented a program to pay the system development fees on any new commercial or industrial development within the boundaries of the two districts. Additionally, the City has agreed to defer payment from SEDA up to the date the Agency sunsets. That date is not defined and is dependent on the Agency accomplishing its stated goals. The earliest it would reasonably sunset is late 2024. Being a noncash transaction and due to the uncertainty and timing of the payments, authoritative accounting standards indicate that no transaction would need to be recorded (GASB statement No. 34, paragraph 112a(1)). However, due to the size of these deferred payments and impact they would have on affected funds, the City has chosen to recognize a receivable and deferred revenue in the governmental funds statements and a receivable and revenue in the government-wide and proprietary fund statements. For the offsetting liability, a corresponding expense and liability has been recognized in the government-wide statements, however, no expenditure or corresponding liability has been recognized in the governmental funds statements. The details of theses deferred fees are as follows:

Receivable Fund Payable Fund Amount Sewer SEDA Glenwood $ 309,977 Sewer SEDA Downtown 104,242 Storm Drainage SEDA Glenwood 45,021 Total advance to/from other funds (different fund types) $ 459,240

Receivable Fund Payable Fund Amount General SEDA Glenwood $ 1,234 Building Code SEDA Glenwood 25 Street Capital SEDA Glenwood 395,961 Street Capital SEDA Glenwood 248,432 Internal Service Funds SEDA Glenwood 43,496 Internal Service Funds SEDA Downtown 17,634 Total due to/from other funds (similar fund types) $ 706,782

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NOTE J – RECEIVABLES AND PAYABLES WITHIN THE REPORTING ENTITY - Continued Interfund Transfers

Transfers are routinely made for the following purposes:

• To move unrestricted revenues collected in the General Fund to finance various programs and activities

accounted for in other funds in accordance with budgetary authorizations. • To move unrestricted revenues collected in other funds to the General Fund to finance government

programs. • To move revenues appropriated for debt service from the funds collecting the receipts to the debt service

fund as debt service payments become due. • To move revenues from the fund the statute or budget requires to collect them in to the fund the statute or

budget requires to expend them. NOTE K – REBATABLE ARBITRAGE The City refunded two previous general obligation bonds in June of 2016 that had zero arbitrage liability. These were replaced with the 2016 general obligation bond in the amount of $14,690,000. The 2016 bond also has no arbitrage liability as of June 30, 2018. The City issued revenue bonds in the amount of $22,815,000 in March of 2009 and $10,000,000 in September 2010. The 2009 revenue bonds were refunded in June of 2017 and replaced with the 2017 Sewer revenue bonds in the amount of $13,610,000. There is no arbitrage liability for these issues as of June 30, 2018. NOTE L – CITY DEFINED BENEFIT PENSION PLAN Plan Description – The City sponsors a pension plan for Springfield Police Association employees hired before April 1, 1996 (City of Springfield, Oregon Retirement Plan – CRP). CRP is a governmental single-employer plan maintained and operated by the City of Springfield. The plan is closed to new entrants and all participants are fully vested. The CRP covers full-time regular employees covered by the Springfield Police Association, Fire management, and all Police management employees hired before April 1, 1996, and all disability retirees formerly in the Money Purchase Pension Plan. As of June 30, 2018, there were 26 participants in the plan, of which 16 are active employees and 10 are inactive employees or their beneficiaries. The CRP is subject to Oregon PERS “equal

Nonmajor TotalGovernmental Transfers

Fund description General Street Funds Out

General -$ 423,873$ -$ 423,873$ Nonmajor Governmental 766,332 - 39,250 805,582

Total Transfers In 766,332$ 423,873$ 39,250$ 1,229,455$

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NOTE L – CITY DEFINED BENEFIT PENSION PLAN – Continued to or better than” statutory requirements. PERS completed its latest “equal to or better than” testing in July of 2005. The most recent testing prior to July 2005 was in 1995. The plan does not issue a separate stand-alone report. City Retirement Plan Benefits Pension Benefits – The City will contribute, as an employer’s contribution to an individual’s retirement account, a percentage of pay for all annual covered salary. The current percentage is 12.8% for sworn public safety employees, 10% for police dispatchers and 7% for other union employees. In addition, the City contributes 6% of salaries as employee contributions. The annual interest earnings to be credited to plan participants’ accounts remains at a guarantee of 9% for emergency service employees while employed with the City, but includes additional provisions on the withdrawal of individual retirement funds once employment is terminated. Police management employees accepted the same terms and conditions for their participation in the CRP. Distribution of Benefits – Upon severance of employment of a participant other than by death, a participant’s vested account balances shall be distributed to the participant as soon as administratively feasible. Participants who retired prior to June 30, 2006 could elect to leave their account balances in the plan up until the age of 70-1/2 with a 9% interest guarantee. Participants that terminate employment with the City subsequent to June 30, 2006 and have reached the age of 50 may elect to leave their account balances in the plan up until the age of 70-1/2 with a 9% interest guarantee the 1st year, 6% for years 2 and 3, 4% for years 4 and 5, and 0% thereafter. For participants who terminate employment with the City after June 30, 2006 and before the age of 50, the interest guarantee is 9% for the 1st year and 0% thereafter. All distributions must be lump sum. Death Benefits – Upon the death of a participant, the participant’s vested account balances shall be distributed to the participant’s beneficiary no later than one year after the date of death. Disability Benefits – A participant who becomes permanently disabled while employed by the City so that the participant is unable to perform all essential duties will continue to earn credits for service up through the earlier of age 60, death, or the date the participant is no longer disabled. Participant accounts will be distributed at the earlier of age 65 or death. Contributions – The CRP is funded through a tax-exempt trust that holds assets and funds benefits for the plan. The assets of the CRP are held for the exclusive benefit of participants and beneficiaries under the terms of the plan and cannot be used to pay any benefits or expenses of any other retirement plan or trust. The benefits are funded by employer contributions and earnings from plan investments. The City’s Council adopted a formal CRP Funding Policy in 2015 that established a policy to systematically fund the liabilities of the plan on a sound actuarial basis, taking into account the closed status of the plan. The funding policy may be amended by the City Council at any time for any reason. The City completes an actuarial study of the CRP as of June 30 every two years. In part, because of the closed membership nature of the plan, the City has implemented a new funding strategy for the CRP. The City now contributes annually to the plan a consistent percentage for all covered salary across all employee groups and an

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NOTE L – CITY DEFINED BENEFIT PENSION PLAN – Continued annual single lump sum in each year of the bi-annual cycle. The percentage contribution for all covered salary is now 30.0%. The annual lump sum contribution for the current bi-annual period is $1,161,000. Employer contributions for the year ended June 30, 2018 were $1,949,686. The General Fund is the governmental fund that will be used to liquidate the net CRP pension liability. Pension Assets, Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions – At June 30, 2018, the City reported a net pension liability of $10,256,349. The net pension liability and fiduciary net position were measured as of June 30, 2018. The total pension liability was determined using actuarial valuation results as of July 1, 2016 rolled forward to June 30, 2018. The following table presents the changes in the net pension liability for the fiscal year ended June 30, 2018:

For the year ended June 30, 2018, the City recognized pension expense of $1,051,617, the details of which are presented in the following table:

Changes in Net Pension Liability Total PensionLiability

Plan FiduciaryNet Position

Net PensionLiability

Balances as of June 30, 2017 36,633,705$ 25,254,554$ 11,379,151$

Changes for the year:Service cost 576,750 - 576,750 Interest on total pension liability 2,137,457 - 2,137,457 Effect of plan changes - - - Effect of economic/demographic (gains) or losses - - - Effect of assumptions changes or inputs - - - Benefit payments (8,653,011) (8,653,011) - Administrative expenses - (86,436) 86,436 Net investment income - 1,973,759 (1,973,759) Employer contributions - 1,949,686 (1,949,686)

Net changes (5,938,804) (4,816,002) (1,122,802)

Balances as of June 30, 2018 30,694,901$ 20,438,552$ 10,256,349$

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NOTE L – CITY DEFINED BENEFIT PENSION PLAN – Continued

At June 30, 2018, the City reported deferred outflows of resources related to pensions from the following sources:

The $1,439,450 net deferred inflows/outflows of resources related to pensions will be recognized as pension expense as follows:

Pension ExpenseJuly 1, 2017 toJune 30, 2018

Service cost 576,750$ Interest on total pension liability 2,137,457 Administrative expenses 86,436 Expected investment return net of investment expenses (1,420,879) Recognition of Deferred (Inflows)/Outflows of Resources:

Recognition of economic/demographic (gains) losses (365,087) Recognition of assumption changes or inputs 15,752 Recognition of investment (gains) losses 21,188

Pension Expense 1,051,617$

Deferred Inflows/Outflows of Resources

Differences between expected and actual experience (912,718)$ -$ Changes of assumptions or inputs - 39,381 Net difference between projected and actual earnings (566,113) - Total (1,478,831)$ 39,381$

Deferred Inflows of Resources

Deferred Outflows of Resources

Year EndingJune 30, Amount

2019 (328,148)$ 2020 (453,237) 2021 (547,489) 2022 (110,576) 2023 -

Thereafter - Total (1,439,450)$

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NOTE L – CITY DEFINED BENEFIT PENSION PLAN – Continued Actuarial Valuations – The total pension liability in the July 1, 2016 actuarial valuation rolled forward to June 30, 2018 was determined using the following actuarial assumptions:

Actuarial Valuation Assumptions

Valuation date July 1, 2016 rolled forward to June 30, 2018. Actuarial cost method Individual entry age normal, level percentage of pay Amortization method Fixed amortization period of 20 years starting July 1, 2016,

with payments calculated in level dollar installments.

Asset valuation method Five-year smoothing of market value investment gains and losses, with the resulting smoothed asset value within 10% of market value.

Actuarial assumptions: Investment rate of return 6.5% per year Projected salary increases 3.0% per year Administrative expenses $39,000 per year Mortality None assumed

Discount Rate – The Plan’s fiduciary net position plus anticipated future contributions in adherence with the funding policy is projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the discount rate for calculating the total pension liability is equal to the long-term expected rate of return of 6.5%. Sensitivity of the City's proportionate share of the net pension liability to changes in the discount rate – The following presents the City's proportionate share of the net pension liability calculated using the discount rate of 6.5%, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (5.5%) or 1-percentage-point higher (7.5%) than the current rate:

Long-Term Expected Rate of Return – To help select the long-term expected rate of return assumption, the plan’s actuary, Milliman Inc, reviewed the plan’s asset allocation as of the most recent July 1, 2016 valuation date. The table below shows Milliman’s assumptions for the general asset classes in which the plan was invested at that

Current 1% Decrease Discount Rate 1% Increase

(5.50%) (6.50%) (7.50%)

Total pension liability 32,117,286$ 30,694,901$ 29,341,916$ Fiduciary net position 20,438,552 20,438,552 20,438,552

Net pension liability 11,678,734$ 10,256,349$ 8,903,364$

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NOTE L – CITY DEFINED BENEFIT PENSION PLAN – Continued time. Each asset class return assumption is based on a consistent set of underlying assumptions, and includes adjustment for the inflation assumption. These assumptions are not based on historical returns, but instead are based on a forward-looking capital market economic model.

Asset Class

Allocation

Compound Annual Return (20-Year

Geometric) Cash 2.6% 2.56% Core Fixed Income 35.0% 3.75% Broad US Equities 30.0% 5.94% Large Cap US Equities 9.9% 5.89% Small Cap US Equities 7.1% 6.23% Developed Economy Foreign Equities 12.3% 6.12% Emerging Markets Equity 3.10% 6.70% Assumed Inflation – Mean 2.30%

NOTE M – PERS DEFINED BENEFIT PENSION PLAN Plan Description – Qualifying employees of the city, consisting of police public safety personnel – covered by the Springfield Police Association (SPA) – and fire public safety personnel, hired on or after April 1, 1996, as well as all general service personnel beginning April 1, 2002, are provided pensions through the Oregon Public Employees Retirement System (OPERS). These pensions are part of a cost-sharing multiple-employer defined benefit plan administered and managed by the Public Employees Retirement System Board. All related benefits were established by the legislature pursuant to ORS Chapters 238 and 238A. OPERS issues a publicly available Comprehensive Annual Financial Report and Actuarial Valuation that can be obtained at http://www.oregon.gov/pers/Pages/Financials/Actuarial-Financial-Information.aspx, or by calling (888) 320-7377, or by writing the Oregon Public Employees Retirement System at PO Box 23700, Tigard, Oregon 97281-3700. Tier One/Tier Two Plan Benefits Pension Benefits – This pension program (ORS Chapter 238A) is closed to new members hired on or after August 29, 2003. The PERS retirement allowance is payable monthly for life. It may be selected from 13 retirement benefit options. These options include survivorship benefits and lump-sum refunds. The basic benefit is based on years of service and final average salary. A percentage (2% for police and fire employees, 1.67% for general service employees) is multiplied by the number of years of service and the final average salary. A member is considered vested and will be eligible at minimum retirement age for a service retirement allowance if he or she has had a contribution in each of five calendar years or has reached at least 50 years of age before ceasing employment with a participating employer (age 45 for police and fire). General Service members may retire after

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http://www.oregon.gov/pers/Pages/Financials/Actuarial-Financial-Information.aspx




NOTE M – PERS DEFINED BENEFIT PENSION PLAN – Continued reaching age 55. Police and fire members are eligible after reaching age 50. Tier One general service member benefits are reduced if retirement occurs prior to age 58 with fewer than 30 years of service. Police and fire member benefits are reduced if retirement occurs prior to age 55 with fewer than 25 years of service. Tier Two members are eligible for full benefits at age 60. Death Benefits – Upon the death of a non-retired member, the beneficiary receives a lump-sum refund of the member’s account balance (accumulated contributions and interest). In addition, the beneficiary will receive a lump-sum payment from employer funds equal to the account balance, provided one or more of the following conditions are met:

• the member was employed by a PERS employer at the time of death, • the member died within 120 days after termination of PERS-covered employment, • the member died as a result of injury sustained while employed in a PERS-covered job, or • the member was on an official leave of absence from a PERS-covered job at the time of death.

Disability Benefits – A member with 10 or more years of creditable service who becomes disabled from other than duty-connected causes may receive a non-duty disability benefit. A disability resulting from a job-incurred injury or illness qualifies a member (including PERS judge members) for disability benefits regardless of the length of PERS-covered service. Upon qualifying for either a non-duty or duty disability, service time is computed to age 58 (55 for police and fire members) when determining the monthly benefit. Benefit Changes After Retirement – Members may choose to continue participation in a variable equities investment account after retiring and may experience annual benefit fluctuations due to changes in the market value of equity investments. Under ORS 238.360 monthly benefits may change annually through cost-of-living adjustments. Under current law, the cap on the COLA in fiscal year 2018 and beyond will vary based on 1.25% on the first $60,000 of annual benefit and 0.15% on annual benefits above $60,000. OPSRP Plan Benefits Pension Benefits – This Pension Program (ORS Chapter 238A) provides benefits to members hired on or after August 29, 2003. This portion of OPSRP provides a life pension funded by employer contributions. Benefits are calculated with a formula for members who attain normal retirement age; for Police and Fire, age 60 or 53 with 25 years of retirement credit, 1.8% is multiplied by the number of years of service and the final average salary; for General Service, age 65 or 58 with 30 years of retirement credit, 1.5% is multiplied by the number of years of service and the final average salary. To be classified as a police and fire member, the individual must have been employed continuously as a police and fire member for at least five years immediately preceding retirement. A member of the OPSRP Pension Program becomes vested on the earliest of the following dates: the date the member completes 600 hours of service in each of five calendar years, the date the member reaches normal retirement age, and, if the pension program is terminated, the date on which termination becomes effective.

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NOTE M – PERS DEFINED BENEFIT PENSION PLAN – Continued Death Benefits – Upon the death of a non-retired member, the spouse – or other person who is constitutionally required to be treated in the same manner as the spouse – receives, for life, 50% of the pension that would otherwise have been paid to the deceased member. The surviving spouse, or other person may elect to delay payment of the death benefit, but payment must commence no later than December 31 of the calendar year in which the member would have reached 70 ½ years. Disability Benefits – A member who has accrued 10 or more years of retirement credits before the member becomes disabled, or a member who becomes disabled due to job-related injury, shall receive a disability benefit of 45% of the member’s salary determined by the last full month of employment before the disability occurred. Benefit Changes After Retirement – Under ORS 238A.210, post retirement monthly benefits will change annually through cost-of-living adjustments. Under current law, the cap on the COLA in fiscal year 2018 and beyond will vary based on 1.25% on the first $60,000 of annual benefit and 0.15% on annual benefits above $60,000. Contributions – PERS funding policy provides for monthly employer contributions at actuarially determined rates. These contributions, expressed as a percentage of covered payroll, are intended to accumulate sufficient assets to pay benefits when due. This funding policy applies to the PERS Defined Benefit Plan and Other Postemployment Benefit Plans. Employer contribution rates during the period were based on the December 31, 2015 actuarial valuation. The City contribution rates in effect for the fiscal year ended June 30, 2018 were 16.85% for Tier One/Tier Two covered members, 13.08% for OPSRP Pension Program Police and Fire Members, and 8.31% for OPSRP Pension Program General Service Members. Employer contributions for the year ended June 30, 2018 were $3,930,696. The General Fund is the governmental fund that will be primarily used to liquidate the net PERS pension liability based on the high level of staffing that is funded from this fund. Pension Assets, Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions – At June 30, 2018, the City reported a liability of $41,153,474 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2017, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2015 rolled forward to June 30, 2017. The City's proportion of the net pension liability was based on a projection of the City's long-term share of contributions to the pension plan relative to the projected contributions of all participating entities, actuarially determined. At June 30, 2017, the City's proportion was 0.3053%, which was changed from 0.2894% measured as of June 30, 2016. For the year ended June 30, 2018, the City recognized pension expense of $8,991,238. At June 30, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

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NOTE M – PERS DEFINED BENEFIT PENSION PLAN – Continued

Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between expected and actual experience

$ 1,990,200

$ -

Changes of assumptions 7,501,544 - Net difference between projected and actual earnings of pension plan investments

423,977

-

Changes in proportion and differences between employer contributions and proportionate share of contributions

1,346,371

( 804,737)

Differences between employer contributions and employer’s proportionate share of system contributions

-

( 722,633)

Total (prior to post measurement date contributions)

11,262,092

( 1,527,370)

Contributions subsequent to the measurement date

3,930,696

- Total Deferred Outflow/Inflow of Resources

$ 15,192,788

$ ( 1,527,370)

The $3,930,696 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Actuarial Valuations – The employer contribution rates effective July 1, 2015, through June 30, 2017, were set using the entry age normal actuarial cost method. Under this cost method, each active member’s entry age present value of projected benefits is allocated over the member’s service from their date of entry until their assumed date of exit, taking into consideration expected future compensation increases. The total pension liability in the December 31, 2015 actuarial valuation was determined using the following actuarial assumptions:

Year Ending June 30, 2019 1,793,212$ 2020 5,146,769 2021 3,503,326 2022 (833,619) 2023 125,034

Total 9,734,722$

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NOTE M – PERS DEFINED BENEFIT PENSION PLAN – Continued Valuation date December 31, 2015

Measurement date June 30, 2017

Experience Study Report 2014, published September 2015 Actuarial cost method Entry Age Normal Actuarial assumptions: Inflation rate Long-term expected rate of return Discount rate Projected salary increases Cost of living adjustments (COLA)

2.50 percent 7.50 percent 7.50 percent 3.50 percent Blend of 2.00% COLA and graded COLA (1.25%/0.15%) in accordance with Moro decision; Blend based on service.

Mortality Healthy retirees and beneficiaries: RP-2000 Sex-distinct, generational per Scale BB, with collar adjustments and set-backs as described in the valuation. Active members: Mortality rates are a percentage of healthy retiree rates that vary by group, as described in the valuation. Disabled retirees: Mortality rates are a percentage (70% for males, 95% for females) of the RP-2000 Sex-distinct, generational per Scale BB disabled mortality table.

The actuarial valuation calculations are based on the benefit provided under the terms of the plan in effect at the time of each valuation and on the patter of sharing of costs between the employer and plan members. Experience studies are performed as of December 31 of even numbered years. The methods and assumptions shown above are based on the 2014 Experience Study which reviewed experience for the four-year period ending on December 31, 2014. Discount Rate – The discount rate used to measure the total pension liability was 7.50% for the Defined Benefit Pension Plan. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and those of the contributing employers are made at the contractually required rates, as actuarially determined. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments for the Defined Benefit Pension Plan was applied to all periods of projected benefit payments to determine the total pension liability.

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NOTE M – PERS DEFINED BENEFIT PENSION PLAN – Continued Depletion Date Projection – GASB Statement No. 68 generally requires that a blended discount rate be used to measure the Total Pension Liability (the Actuarial Accrued Liability calculated using the Individual Entry Age Normal Cost Method). The long-term expected return on plan investments may be used to discount liabilities to the extent that the plan’s Fiduciary Net Position (fair market value of assets) is projected to cover benefit payments and administrative expenses. A 20-year high quality (AA/Aa or higher) municipal bond rate must be used for periods where the Fiduciary Net Position is not projected to cover benefit payments and administrative expenses. Sensitivity of the City's proportionate share of the net pension liability to changes in the discount rate – The following presents the City's proportionate share of the net pension liability (asset) calculated using the discount rate of 7.50%, as well as what the City's proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate:

1 % Decrease

(6.50%)

Current Discount Rate

(7.50%)

1 % Increase

(8.50%) City’s proportionate share of the net pension liability (asset)

$70,133,034

$41,153,474

$16,921,196

Long-Term Expected Rate of Return – To develop an analytical basis for the selection of the long-term expected rate of return assumption, in July 2015 the PERS Board reviewed long-term assumptions developed by both Milliman’s capital market assumptions team and the Oregon Investment Council’s (OIC) investment advisors. The table below shows Milliman’s assumptions for each of the asset classes in which the plan was invested at that time based on the OIC long-term target asset allocation. The OIC’s description of each asset class was used to map the target allocation to the asset classes shown below. Each asset class assumption is based on a consistent set of underlying assumptions, and includes adjustment for the inflation assumption. These assumptions are not based on historical returns, but instead are based on a forward-looking capital market economic model.

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NOTE M – PERS DEFINED BENEFIT PENSION PLAN – Continued

Pension plan fiduciary net position – Detailed information about the pension plan's fiduciary net position is available in the separately issued OPERS financial report. The effect of OPERS on the City’s net position has been determined on the same basis used by OPERS. NOTE N – PERS DEFINED CONTRIBUTION PENSION PLAN Plan Description – OPSRP Individual Account Program (IAP) is a defined contribution pension plan for Tier One/Tier Two and OPSRP plan members. All benefits of the system are established by the legislature pursuant to ORS Chapters 238 and 238A.

CompoundAnnual Return

Asset Class Target (Geometric)

Core Fixed Income 8.0% 4.0%Short-Term Bonds 8.00 3.61 Bank/Leveraged Loans 3.00 5.42 High Yield Bonds 1.00 6.20 Large/Mid Cap US Equities 15.75 6.70 Small Cap US Equities 1.31 6.99 Micro Cap US Equities 1.31 7.01 Developed Foreign Equities 13.13 6.73 Emerging Market Equities 4.12 7.25 Non-US Small Cap Equities 1.88 7.22 Private Equity 17.50 7.97 Real Estate (Property) 10.00 5.84 Real Estate (REITS) 2.50 6.69 Hedge Fund of Funds - Diversified 2.50 4.64 Hedge Fund - Event-driven 0.63 6.72 Timber 1.88 5.85 Farmland 1.88 6.37 Infrastructure 3.75 7.13 Commodities 1.88 4.58 Assumed Inflation - Mean - 2.50

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NOTE N – PERS DEFINED BENEFIT PENSION PLAN – Continued Plan Benefits – An IAP member becomes vested on the date the employee account is established or on the date the rollover account was established. If the employer makes optional employer contributions for a member, the member becomes vested on the earliest of the following dates: the date the member completes 600 hours of service in each of five calendar years, the date the member reaches normal retirement age, the date the IAP is terminated, the date the active member becomes disabled, or the date the active member dies. Upon retirement, a member of the OPSRP IAP may receive the amounts in his or her employee account, rollover account, and vested employer account as a lump-sum payment or in equal installments over a 5-, 10-, 15-, or 20-year period or anticipated life span option. Each distribution option has a $200 minimum distribution limit. Death Benefits – Upon the death of a non-retired member, the beneficiary receives in a lump sum the member’s account balance, rollover account balance, and vested employer optional contribution account balance. If a retired member dies before the installment payments are completed, the beneficiary may receive the remaining installment payments of choose a lump-sum payment. Recordkeeping – PERS contracts with VOYA Financial to maintain IAP participant records. Contributions – State statute requires that covered employees contribute 6% of their covered salary to the IAP plan effective January 1, 2004. Statute allows that the employer may elect to pay any or all of the employee’s required IAP contributions. The City has elected to pay all of the employees’ required IAP contribution, except for employees who are members of the City’s International Association of Fire Fighters (IAFF) union, which elected to pay the required employee contribution. For the fiscal year ending June 30, 2018, the City’s contribution to the IAP plan was $1,803,958. NOTE O – OTHER POSTEMPLOYMENT BENEFITS The other postemployment benefits (OPEB) for the City combines two separate plans. The City provides an implicit rate subsidy for retiree medical insurance premiums, and a contribution to the State of Oregon’s PERS cost-sharing multiple-employer defined health insurance benefit plan. The total OPEB liability is aggregated in the State of Net Position. Financial Statement Presentation The City’s two OPEB plans are presented in the aggregate on the Statement of Net Position. The amounts on the financial statements relate to the plans as follows:

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NOTE O – OTHER POSTEMPLOYMENT BENEFITS – Continued

IMPLICIT RATE SUBSIDY PLAN Plan Description Plan Description - The City administers a single-employer defined benefit healthcare plan as established through negotiations between the City and collective bargaining units. The healthcare plan provides post-retirement medical, dental, and vision coverage for eligible retirees, spouses, and dependents. The following groups are eligible: Non-Medicare eligible regular retirees, disability retirees, Non-Medicare eligible early retirees eligible for pension under a City Plan or OPERS with at least 5 years of benefited service at the City, and Non-Medicare eligible early retirees whose age plus years of service equal 70 or greater at their time of retirement. At June 30, 2018, 26 qualified retirees are eligible to receive this benefit. The retiree is responsible for the full premium as established by the City for all participants of the plan less a subsidy of $115 per month provided by the City. The City treats this subsidy as a single-employer, defined benefit OPEB plan administered by the City only to satisfy the accounting and financial reporting requirements of GASB 75, and a separate financial report is not issued. The total cost of providing this subsidy for the fiscal year ended June 30, 2018 was $34,285. The City also provides disability retirement contributions for employees who cease working because of a permanent disability. The following groups are eligible: employees, who at the time of disability retirement were covered under the City Retirement Plan, and employees, who at the time of disability retirement were covered under the Money Purchase Pension Plan. The authority for this coverage is in the pension plan documents. All of the disability retirees are members of the City Retirement Plan. For these employees, the amount of the pension contribution is either 7%, 8%, or 9% of the employee’s last monthly salary, depending on what the employee’s contribution rate was before retirement. At June 30, 2018, there was one employee receiving this benefit.

Implicit Rate RHIA TotalSubsidy Plan Cost Sharing Plan Reported

OPEB Asset/(Liability) (7,412,283)$ 124,618$ (7,287,665)$

Deferred Outflows of Resources Contributions after the measurement date 361,762 148,660 510,422

Deferred Inflows of Resources Difference in Earnings (440,172) (57,716) (497,888) Change in proportionate share - (654) (654)

OPEB Expense 621,442 427 621,869

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NOTE O – OTHER POSTEMPLOYMENT BENEFITS – Continued Total OPEB Liability, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB - The City’s total OPEB liability of $7,412,283 was measured as of June 30, 2017, and was determined by an actuarial valuation as of July 1, 2016. For the fiscal year ended June 30, 2018, the City recognized OPEB expense from this plan of $621,442. At June 30, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to this OPEB plan from the following sources:

Deferred outflows of resources related to OPEB of $361,762 resulting from the City’s contributions subsequent to the measurement date will be recognized as a reduction of the total OPEB liability in the year ending June 30, 2019. Other amounts reported as deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Actuarial Assumptions and Other Inputs - The total OPEB liability in the July 1, 2016 valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:

Net DeferredDeferred Inflows Deferred Outflows (Inflows)/Outflows

of Resources of Resources of Resources

Changes of assumptions or inputs (440,172)$ -$ (440,172)$ Contributions made subsequent to measurement date - 361,762 361,762

(440,172)$ 361,762$ (78,410)$

Year Ended AnnualJune 30: Recognition

2019 (55,718)$ 2020 (55,718) 2021 (55,718) 2022 (55,718) 2023 (55,718)

Thereafter (161,582)

Total (440,172)$

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Changes in the Total OPEB Liability (Implicit Rate Subsidy Plan)

Changes in assumptions are the result of the change in discount rate from 2.85% to 3.58%. Sensitivity of the Total OPEB Liability - The following presents the total OPEB liability of the Plan, calculated using the discount rate of 3.58%, as well as what the Plan’s total OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower (2.58%) or 1 percentage point higher (4.58%) than the current rate. A similar sensitivity analysis is then presented for changes in the healthcare cost trend assumption.

Valuation date July 1, 2016Measurement Date June 30, 2017Inflation 2.50%Salary Increases 3.50%Healthy Mortality RP-2000 healthy white collar male and female mortality tables, set back

one year for males. Mortality is projected on a generational basis usingScale BB for males and females.

Actuarial cost method Entry Age Normal

Balance as of June 30, 2017 6,559,960$

Restatement for GASB 75 Implementation 980,361

Balance as of June 30, 2017, as restated 7,540,321

Changes for the year:Service Cost 453,737 Interest on total OPEB liability 223,423 Effect of changes to benefit terms - Effect of economic/demographic gains or losses - Effect of assumptions changes or inputs (495,892)

Benefit payments (309,306)

Balance as of June 30, 2018 7,412,283$

108





PERS RETIREMENT HEALTH INSURANCE ACCOUNT (RHIA) Plan Description - The City contributes to the Oregon Public Employees Retirement System’ (PERS) Retiree Health Insurance Account (RHIA), a cost-sharing multiple-employer defined benefit post-employment healthcare plan administered by the Public Employees Retirement Board (PERB). The authority to establish and amend the benefit provisions of the plan rests with the Oregon Legislature. The plan, which was established under ORS 238.420, provides a payment of up to $60 per month towards the costs of health insurance for eligible PERS retirees. RHIA post-employment benefits are set by state statue. A comprehensive annual financial report of the funds administered by the PERB may be obtained by writing to Oregon Public Employees Retirement System at PO Box 23700, Tigard, Oregon 97281-3700, by calling (888) 320-7377, or by accessing the PERS website at http://www.oregon.gov/PERS/. Funding Policy and contributions - Participating employers are contractually required to contribute at a rate assessed bi-annually by the PERB, currently 0.50% of annual covered payroll for PERS Plan members, and 0.43% for OPSRP Plan members. The PERB sets the employer contribution rate based on an amount actuarially determined in accordance with the parameters of GASB Statement No. 75. The level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any actuarial liabilities of the plan over a period not to exceed five years. The City’s total for the year ended June 30, 2018 contributions was $148,660. OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflow of Resources Related to OPEB - For the employer cost-sharing plan, the OPEB liability was based on the employer’s share of covered payroll in the OPEB plan relative to the covered payroll of all participating OPEB employers. At June 30, 2018, the City’s proportion was 0.2986%, which was a decrease from its proportion of 0.3019% at the prior measurement date. For the year ended June 30, 2018, the City recognized deferred outflows of resources and deferred inflows of resources in the amount of $148,660 and $58,370. For the year ended June 30, 2018, the City recognized an OPEB expense of $427 for this plan.


TotaL OPEB liability 8,101,542$ 7,412,283$ 6,781,491$

Current 1% Decrease Trend Rate 1% Increase

TotaL OPEB liability 6,604,136$ 7,412,283$ 8,371,490$

109

http://www.oregon.gov/PERS





Other amounts reported as deferred inflows related to the Oregon’s PERS cost-sharing plan will be recognized in OPEB expense as follows:

Change in Net OPEB Liability (RHIA)

Net DeferredDeferred Inflows Deferred Outflows (Inflows)/Outflows

of Resources of Resources of ResourcesNet difference between projected and actual earnings (57,716)$ -$ (57,716)$ Changes in proportionate share (654) - (654)

Subtotal (58,370) - (58,370) Contributions subsequent to the measurement date - 148,660 148,660

Total (58,370)$ 148,660$ 90,290$

Year Ended Annual June 30: Recognition

2019 (14,671)$ 2020 (14,671) 2021 (14,599) 2022 (14,429) 2023 -

Thereafter - Total (58,370)$

Oregon Public Employees Retirement System Cost-sharing Plan 2018Net OPEB Liability:Difference between expected and actual experience (57,716)$ Change in proportionate share (654) OPEB expense 427 Benefit payments (148,660) Net changes in OPEB liability (206,603)

Net OPEB liability (asset) - beginning 81,985 Net OPEB liability (asset) - ending (124,618)$

City's proportionate share at measurement date 0.29860053%

City's covered employee payroll 29,957,604$

City's proportionate share of the net OPEB liability (asset) as apercentage of its covered payroll -0.4%

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NOTE O – OTHER POSTEMPLOYMENT BENEFITS – Continued Discount Rate - The discount rate used to measure the net OPEB liability for the RHIA Plan was 7.50%. The projection of cash flows used to determine the discount rate assumed that the contributions from plan members and those contributing employers are made at the contractually required rates, as actuarially determined. Based on those assumptions, the RHIA plan’s fiduciary net position was projected to be available to make all projected future benefit payments. Therefore, the long term expected rate of return on pension plan investments for the RHIA Plan was applied to all periods of projected benefit payments to determine the net OPEB liability. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate - The following presents the City’s proportionate share of the net OPEB liability (asset) calculated using the discount rate of 7.50%, as well as what the City’s proportionate share of the net OPEB liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate:

Actuarial Methods and Assumptions - All actuarial methods and assumptions are consistent with those disclosed for the OPERS Pension Plan. See Note M for additional information on assumptions and methods, the Long-Term Expected Rate of Return, and the Discount Rate. NOTE P – COMMITMENTS AND CONTINGENCIES At June 30, 2018, the City was obligated under incomplete construction contracts in the amount of $89,508. The Sick Leave Reserve Program was substantially revised effective July 1, 2004. The plan allows employees to join by contributing hours from their sick leave bank. The number of hours required to join depends on the employee’s status (full time vs. part time) and regular weekly schedule (40 hours vs. 56 hours). Employees may draw from the reserve bank under certain circumstances. Prior to drawing, employees must exhaust all their own leave accruals first. At June 30, 2018, the Sick Leave Reserve Program bank contained 7,167 hours. The value of these hours is not included in the liability for compensated absences because there is no estimate of the number of hours that will be used. NOTE Q – RESTATEMENT/PRIOR PERIOD ADJUSTMENT Change in Accounting Principle Based on the implementation of GASB Statement No. 75, the City restated the beginning net position for Governmental and Business-type Activities to recognize their proportionate share of the OPEB liability and deferred outflows of resources as of July 1, 2017.


(6.50%) (7.50%) (8.50%)Net OPEB Liability (Asset) 17,372$ (124,618)$ (245,389)$

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NOTE Q – RESTATEMENT/PRIOR PERIOD ADJUSTMENT – Continued Prior Period Adjustment Prior period adjustments were recorded increasing net position for in the utility funds (sewer and storm) relating to timing of accounts receivable, and decreasing the sewer net position for a liability that should have been recorded in a prior year for system development charge credits. Additionally, the City reversed prior year internal service fund revenue (vehicle and equipment fund) that was charged to a fund that is no longer considered a component unit. Details of the restatements and prior period adjustments are outlined in the table below:

NOTE R – CONSTITUTIONAL PROPERTY TAX LIMITATION The State of Oregon has a constitutional limit on property taxes for governmental operations. The limitation specifies a maximum rate for local government operations of $10.00 per $1,000 of assessed value. In May 1997, the voters approved a citizen initiative (Measure 50) that rolls back assessed property values to 90 percent of their 1995-96 real market value amount and limits future increases to 3 percent per year, except for major improvements. Under Measure 50, voters may approve new local initiatives provided a majority approves at either a general election in an even numbered year, or at any other election in which at least 50 percent of registered voters cast a ballot. This double majority requirement for local initiatives is no longer required as a result of the passage of statewide measure 56, passed on November 4, 2008.

Governmental Business-typeDescription Activities Activities TotalNet Position as previously reported at June 30, 2017 127,820,031$ 90,778,342$ 218,598,373$ Change in accounting principle Net OPEB Liability (875,858) (201,272) (1,077,130)

Prior Period Adjustment Sewer fund receivable adjustment - 545,536 545,536 Storm fund receivable adjustmment - 523,998 523,998 Sewer fund SDC credit adjustment - (506,567) (506,567) Vehicle and equipment fund revenue reversal (84,188) - (84,188)

Total prior period adjustments (84,188) 562,967 478,779

Total restatement (960,046) 361,695 (598,351)

Net position, as restated, July 1, 2017 126,859,985$ 91,140,037$ 218,000,022$

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NOTE S – TAX ABATEMENT As of June 30, 2018, the City of Springfield provides tax abatements through two programs: Enterprise Zone and Vertical Housing. Enterprise Zone (ORS 285C.175) The purpose of the Enterprise Zone program is to stimulate and protect economic success by providing tax incentives for employment, business, industry and commerce and by providing adequate levels of complementary assistance to community strategies for such interrelated goals as environmental protection, growth management and efficient infrastructure. To be an eligible business firm, a business firm must be engaged, or proposing to engage, within the enterprise zone, in the business of providing goods, products or services to businesses or other organizations through activities including, but not limited to, manufacturing, assembly, fabrication, processing, shipping or storage. Qualified real and personal property owned or leased and newly placed into service by a qualified business in an enterprise zone is exempt from property tax for three years. The exemption period may be increased to a total of four or five consecutive years. For the basic, three-year enterprise zone exemption period, the business needs to: • Increase full-time, permanent employment of the firm inside the enterprise zone by the greater of one new job or 10% (or less with special-case local sponsor waivers);

• Generally have no concurrent job losses outside the zone boundary inside Oregon; • Maintain minimum employment level during the exemption period; • Enter into a first-source agreement with local job training providers; and • Satisfy any additional local condition that has been established (only) in an urban zone. Vertical Housing (ORS 307.841 – 307.867) A vertical housing development project must consist of the construction or rehabilitation of a multiple-story building, or a group of buildings, including at least one multiple-story building, so that a portion of the project is to be used for nonresidential uses and a portion of the project is to be used for residential uses. The purpose is to encourage investment in and rehabilitation of properties in targeted areas, to augment the availability of appropriate housing, and to revitalize communities. A person proposing to undertake a proposed vertical housing development project and seeking the partial property tax exemption must apply to the Housing and Community Services Department for certification of the project. The application must contain the required project information to meet criteria established by the department. The partial property tax exemption depends on the number of floors dedicated to residential housing, calculated using a equalized floor measure which is the total square footage of the project divided by the number of floors that are at least 500 square feet per floor.

113




NOTE S – TAX ABATEMENT – Continued For the fiscal year ended June 30, 2018, the City of Springfield abated taxes totaling $1,037,044 under these programs:

Amount of TaxesAbated during the

Tax Abatement Program Fiscal YearEnterprise Zone 1,033,893$ Vertical Housing 3,151

1,037,044$

114

Required Supplementary Information

115

116


GENERAL FUNDSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE

(NONGAAP BUDGETARY BASIS) - BUDGET AND ACTUAL


Adjustmentsto Budget GAAP

Original Revised Basis BasisBudget Budget Actual Variance Actual Actual

Revenues:Taxes 20,700,380$ 20,700,380$ 20,947,987$ 247,607$ -$ 20,947,987$ Licenses, permits and fees 2,807,472 2,807,472 2,941,854 134,382 - 2,941,854 Intergovernmental revenue 4,200,941 4,576,779 4,738,525 161,746 (169,986) 4,568,539 Charges for services 5,694,409 5,703,582 5,564,006 (139,576) - 5,564,006 Fines and forfeitures 1,776,000 1,776,000 1,688,632 (87,368) - 1,688,632 Investment earnings 94,125 94,125 166,928 72,803 3,602 170,530 Miscellaneous revenue 334,359 334,359 314,431 (19,928) - 314,431

Total revenues 35,607,686 35,992,697 36,362,363 369,666 (166,384) 36,195,979


City manager's office 1,326,121 1,373,343 1,281,950 91,393 (302) 1,281,648 Legal and judicial services 718,582 737,582 644,794 92,788 - 644,794 Human resources 599,598 699,598 578,842 120,756 - 578,842 Finance 2,109,718 2,168,218 2,096,863 71,355 627 2,097,490 Information technology 1,790,537 1,875,277 1,704,777 170,500 (906) 1,703,871 Fire and life safety 11,397,710 11,703,548 11,412,497 291,051 (3,028) 11,409,469 Police 14,106,032 14,156,031 13,979,389 176,642 21,377 14,000,766 Library 1,661,033 1,673,173 1,491,649 181,524 (2,637) 1,489,012 Development and public works 2,499,073 2,504,073 2,339,817 164,256 (1,951) 2,337,866

Contingency 1,000,000 1,000,000 - 1,000,000 - -

Total expenditures 37,208,404 37,890,843 35,530,578 2,360,265 13,180 35,543,758

Excess of revenues over (under) expenditures (1,600,718) (1,898,146) 831,785 2,729,931 (179,564) 652,221

Other financing sources (uses):Transfers in 1,175,906 1,179,906 766,332 (413,574) - 766,332 Transfers out (411,300) (437,123) (437,123) - - (437,123)

Total other financing sources (uses) 764,606 742,783 329,209 (413,574) - 329,209

Net change in fund balances (836,112) (1,155,363) 1,160,994 2,316,357 (179,564) 981,430

Fund balance, beginning of year 7,787,308 8,574,036 8,574,036 - 189,998 8,764,034

Fund balance, end of year 6,951,196$ 7,418,673$ 9,735,030$ 2,316,357$ 10,434$ 9,745,464$

117


STREET FUNDSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE


Year ended June 30, 2018



Revenues:Taxes 1,100,000$ 1,100,000$ 1,081,791$ (18,209)$ -$ 1,081,791$ Licenses, permits and fees 145,000 145,000 153,433 8,433 - 153,433 Intergovernmental revenue 3,677,500 3,677,500 4,144,800 467,300 - 4,144,800 Charges for services 92,500 92,500 101,343 8,843 - 101,343 Investment earnings 3,000 3,000 10,141 7,141 1,121 11,262 Miscellaneous revenue 4,000 4,000 20,478 16,478 - 20,478

Total revenues 5,022,000 5,022,000 5,511,986 489,986 1,121 5,513,107


Information technology 338,007 376,538 253,062 123,476 - 253,062 Development and public works 5,070,323 5,070,323 4,954,033 116,290 (9,216) 4,944,817

Total expenditures 5,408,330 5,446,861 5,207,095 239,766 (9,216) 5,197,879

Excess of revenues over(under) expenditures (386,330) (424,861) 304,891 729,752 10,337 315,228

Other financing sources (uses):Transfers in 411,300 423,873 423,873 - - 423,873

Net change in fund balances 24,970 (988) 728,764 729,752 10,337 739,101

Fund balance, beginning of year 634,399 944,650 944,650 - 202,703 1,147,353

Change in reserve for inventory - - - - 33,428 33,428

Fund balance, end of year 659,369$ 943,662$ 1,673,414$ 729,752$ 246,468$ 1,919,882$

118


POLICE LOCAL OPTION LEVYSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE





Revenues:Taxes 5,511,265$ 5,511,265$ 5,581,613$ 70,348$ -$ 5,581,613$ Licenses, permits, and fees 227,580 227,580 105,107 (122,473) - 105,107 Charge for services 212,600 212,600 394,504 181,904 - 394,504 Investment earnings 14,000 14,000 23,868 9,868 (11) 23,857 Miscellaneous receipts - - 6,611 6,611 - 6,611

Total revenues 5,965,445 5,965,445 6,111,703 146,258 (11) 6,111,692


Judicial services 659,841 659,841 659,668 173 - 659,668 Legal services 64,143 64,143 53,568 10,575 - 53,568 Police 5,821,624 5,887,337 5,666,012 221,325 1,138 5,667,150

Total expenditures 6,545,608 6,611,321 6,379,248 232,073 1,138 6,380,386

Net change in fund balances (580,163) (645,876) (267,545) 378,331 (1,149) (268,694)



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REQUIRED SUPPLEMENTARY INFORMATION


CITY RETIREMENT PLAN PENSION BENEFITS Schedule of CRP Funding Progress

Schedule of CRP Employer Contributions

Acturial Valuation Date

Acturial Value of Assets

Acturial Accrued Liability (AAL)

Unfunded AAL (UAAL)

Funded Ratio Covered Payroll

UAAL as a Percentage of

Covered Payroll7/1/2012 18,587,213$ 34,827,342$ 16,240,129$ 53.4% 2,621,746$ 619%7/1/2014 19,296,361 34,890,821 15,594,460 55.3% 2,266,218 688%7/1/2016 21,211,910 33,852,137 12,640,227 62.7% 2,027,918 623%

2018 2017 2016 2015 2014 2013 2012 2011 2010 2009

Actuarially determined contribution 1,823$ 1,874$ 1,875$ 1,936$ 2,088$ 1,790$ 1,810$ 1,209$ 1,303$ 1,359$ Actual employer contribution 1,950 1,916 1,954 1,965 2,088 1,790 1,810 1,209 1,303 1,359 Contribution deficiency (Excess) (127) (42) (79) (29) - - - - - - Covered payroll 2,208 2,027 2,034 2,101 2,426 2,498 2,535 2,738 2,944 3,027 Contribution as a % of covered payroll 88.32% 94.52% 96.07% 93.53% 86.07% 71.66% 71.40% 44.16% 44.26% 44.90%

Valuation Date 7/1/2016 7/1/2016 7/1/2014 7/1/2014 7/1/2012 7/1/2012 7/1/2010 7/1/2010 7/1/2008 7/1/2008Investment Rate of Return Assumption 6.50% 6.50% 6.50% 6.50% 6.50% 7.50% 7.50% 7.50% 7.50% 8.00%

(Dollar Amounts in Thousands)

Fiscal Year Ending June 30,

120



Year Ended June 30, 2018 CITY RETIREMENT PLAN PENSION BENEFITS – Continued Schedule of Changes in Total Pension Liability, Fiduciary Net Position, and Related Ratios

2018 2017 2016 2015Total Pension Liability Service cost 576,750$ 596,684$ 608,191$ 611,102$ Interest on total pension liability 2,137,457 2,333,205 2,199,860 2,186,388 Effect of economic/demographic (gains) or losses - (1,642,892) - - Effect of assumptions changes or inputs - 70,885 - - Benefit payments (8,653,011) (45,910) (1,444,246) (3,730,383) Net change in total pension liability (5,938,804) 1,311,972 1,363,805 (932,893)

Total pension liability, beginning 36,633,705 35,321,733 33,957,928 34,890,821 Total pension liability, ending (a) 30,694,901 36,633,705 35,321,733 33,957,928

Fiduciary Net Position Employer contributions 1,949,686 1,916,262 1,953,954 1,964,977 Investment income net of investment expenses 1,973,759 2,717,812 (12,259) 708,524 Benefit payments (8,653,011) (45,910) (1,444,246) (3,730,383) Administrative expenses (86,436) (76,423) (68,077) (70,078) Net change in plan net position (4,816,002) 4,511,741 429,372 (1,126,960) Fiduciary net position, beginning 25,254,554 20,742,813 20,313,441 21,440,401 Fiduciary net position, ending (b) 20,438,552 25,254,554 20,742,813 20,313,441

Net pension liability, ending (a) - (b) 10,256,349$ 11,379,151$ 14,578,920$ 13,644,487$ Fiduciary net position as a % of total pension liability 67% 69% 59% 60%

Covered payroll 2,207,506$ 2,027,175$ 2,034,238$ 2,100,871$ Net pension liability as a % of covered payroll 465% 561% 717% 649%

121



Year Ended June 30, 2018 OPERS RETIREMENT PLAN PENSION BENEFITS Schedule of Proportionate Share of Net Pension Liability

Schedule of Contributions

2018 2017 2016 2015 2014

Proportion of the net pension liability (asset) 0.3053% 0.2894% 0.3089% 0.2801% 0.2801%Proportionate share of the net pension liability (asset) 41,153,474$ 43,443,622$ 17,733,343$ (6,349,764)$ 14,295,480$ Covered payroll 29,957,604 29,371,018 28,785,414 27,340,088 26,270,045 Proportionate share of the pension liability (asset) as a percentage of its covered employee payroll 137.37% 147.91% 61.61% -23.23% 54.42%Plan net position as a percentage of the total pension liability 83.1% 80.5% 91.9% 103.6% 92.0%

*This schedule is intended to show a 10-year trend of changes in the net pension liability. However, until a full 10-year trend is compiled,

information will only be presented for those years in which it is available.


2018 2017 2016 2015 2014

Contractually required contribution 3,930,696$ 2,875,247$ 2,718,458$ 2,393,904$ 2,371,838$ Contributions in relation to the contractually required contribution 3,930,696 2,875,247 2,718,458 2,393,904 2,371,838 Contribution deficiency (excess) -$ -$ -$ -$ -$

Covered employee payroll 29,957,604$ 29,371,018$ 28,785,414$ 27,340,088$ 26,270,045$ Contributions as a percentage of covered employee payroll 13.12% 9.79% 9.44% 8.76% 9.03%

*This schedule is intended to show a 10-year trend of contributions. However, until a full 10-year trend is compiled, information will only be

presented for those years in which it is available.


122



Year Ended June 30, 2018 OPEB RETIREMENT PLAN PENSION BENEFITS Schedule of Proportionate Share of Net OPEB Liability

Fiscal Year

Implicit Rate Subsidy Plan 2018Total OPEB Liability:Services cost 453,737$ Interest 223,423 Difference between expected and actual experienceChanges of assumptions (495,892) Benefit payments (309,306) Net change in total OPEB liability (128,038)$

Total OPEB liability - beginning 6,559,960 Restatement for GASB 75 Implementation 980,361

Total OPEB liability - beginning as restated 7,540,321 Total OPEB liability - ending 7,412,283$

City's covered employee payroll 29,957,604$ Total OPEB liability as a percentage of covered payroll 24.7%

*This schedule is intended to show a 10-year trend of changes in the net pension liability. However, until a full 10-year trend is compiled, information will only be presented for those years in which it is available.

Ending June 30,

123



Year Ended June 30, 2018 OPEB RETIREMENT PLAN PENSION BENEFITS – Continued Schedule of Proportionate Share of Net OPEB Liability

Schedule of Contributions

Fiscal YearEnding June 30,

RHIA Cost Sharing Plan 2018Net OPEB Liability:Proportion of the net pension liability (asset) 0.2986%Proportionate share of the net pension liability (asset) (124,618)$ Covered payroll 29,957,604 Proportionate share of the pension liability (asset) as a percentage of its covered employee payroll -0.4%Plan net position as a percentage of the total pension liability 108.9%

*This schedule is intended to show a 10-year trend of changes in the net pension liability. However, until a full 10-year trend is compiled, information will only be presented for those years in which it is available.

Fiscal Year

2018

Contractually required contribution 139,708$ Contributions in relation to the contractually required contribution 148,660 Contribution deficiency (excess) (8,952)$

Covered employee payroll 29,957,604$ Contributions as a percentage of covered employee payroll 0.47%

*This schedule is intended to show a 10-year trend of contributions. However, until a full 10-year trend is compiled, information will only be presented for those years in which it is available.

Ending June 30,

124

Other Supplementary Information

125

126

Nonmajor Governmental Funds Combining Statements

127

128


NONMAJOR GOVERNMENTAL FUNDSCOMBINING BALANCE SHEET

June 30, 2018

TotalNonmajor

Special Capital Debt GovernmentalRevenue Funds Projects Funds Service Funds Funds

ASSETSCash and investments 11,662,192$ 7,356,410$ 386,868$ 19,405,470$ Receivables:

Accounts 333,721 4,809 - 338,530 Taxes 187,239 - 260,556 447,795 Grants 140,750 - - 140,750 Accrued interest 25,680 30,790 4,188 60,658 Assessments and liens - 77,748 1,969 79,717 Notes 1,375,901 370,584 - 1,746,485 Deferred system development fees 25 644,393 - 644,418

Prepaid items - 1,016 - 1,016

Total assets 13,725,508$ 8,485,750$ 653,581$ 22,864,839$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCESLiabilities:

Accounts payable 411,236$ 102,869$ 3,412$ 517,517$ Accrued payroll and other liabilities 58,804 1,025 - 59,829 Deposits 1,500 - - 1,500

Total liabilities 471,540 103,894 3,412 578,846

Deferred inflows of resources:Unavailable revenue 1,787,484 1,104,020 262,525 3,154,029

Fund Balances:Nonspendable - 1,016 - 1,016 Restricted 11,036,073 4,591,545 382,512 16,010,130 Committed - 2,200,742 - 2,200,742 Assigned 430,411 484,533 5,132 920,076 Unassigned - - - -

Total fund balances 11,466,484 7,277,836 387,644 19,131,964

Total liabilities, deferred inflows of resources, and fund balances 13,725,508$ 8,485,750$ 653,581$ 22,864,839$

129

TotalNonmajor

Special Capital Debt GovernmentalRevenue Funds Project Funds Service Funds Funds

Revenues:Taxes 4,365,746$ -$ 1,817,849$ 6,183,595$ Licenses, permits and fees 51,515 - - 51,515 Intergovernmental revenue 802,280 - - 802,280 Charges for services 1,334,594 1,346,208 - 2,680,802 Fines and forfeitures 125,310 - - 125,310 Investment earnings 101,322 106,199 14,401 221,922 Special assessments - 13,082 - 13,082 Miscellaneous revenue 326,875 117,504 - 444,379

Total revenues 7,107,642 1,582,993 1,832,250 10,522,885


General government 591,927 36,934 - 628,861 Fire and life safety 1,485,213 - - 1,485,213 Police 80,563 - - 80,563 Library 157,787 - - 157,787 Development and public works 1,604,790 148,585 - 1,753,375

Capital projects 101,672 865,498 - 967,170 Debt service:

Principal 305,530 - 1,390,000 1,695,530 Interest 75,057 - 578,600 653,657

Total expenditures 4,402,539 1,051,017 1,968,600 7,422,156

Excess of revenues over(under) expenditures 2,705,103 531,976 (136,350) 3,100,729

Other financing sources (uses):Issuance of debt 2,729,248 - - 2,729,248 Transfers in - 39,250 - 39,250 Transfers out (613,794) (85,538) (30,000) (729,332)

Total other financing sources (uses) 2,115,454 (46,288) (30,000) 2,039,166

4,820,557 485,688 (166,350) 5,139,895

Fund balance, beginning of year 6,645,927 6,792,148 553,994 13,992,069

Fund balance, end of year 11,466,484$ 7,277,836$ 387,644$ 19,131,964$

Net change in fund balances


COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCENONMAJOR GOVERNMENTAL FUNDS


130

Special Revenue Funds Combining statements for all individual nonmajor special revenue funds are reported here. The combined totals are reported in the combining nonmajor governmental fund statements. Fund statements for major special revenue funds are reported in the basic financial statements. Schedules of revenues, expenses, and changes in fund balance – budget and actual are presented here for each individual nonmajor special revenue fund. Budget and actual comparisons for major special revenue funds are reported as required supplementary information. Major Special Revenue Funds: Street Fund – This fund accounts for revenues from state gasoline taxes apportioned from the State of Oregon and expenditures as specified under Article IX, Section 3 of the Constitution of the State of Oregon. Police Local Option Levy – This fund accounts for revenue received from a five-year Police Local Option Levy to enhance public safety services by adding staff to the Police and Court Departments as well as funding jail operations. Nonmajor Special Revenue Funds: Special Revenue Fund – This fund accounts for the receipt of 911 taxes collected to provide an emergency communications system and the receipt and expenditure of grant monies from various state and federal government agencies. Transient Room Tax Fund – This fund accounts for revenues from hotel and motel taxes and expenditures related and restricted to the economic development of the area. Community Development Fund – This fund accounts for the receipt and expenditure of monies received from the United States Government under the Community Development Block Grant Program. Building Code Fund – This fund accounts for the dedicated revenues generated in providing building permit and inspection services. SEDA Glenwood Fund – This fund accounts for the general fund of the Springfield Economic Development Agency Glenwood Urban Renewal District. SEDA Downtown Fund – This fund accounts for the general fund of the Springfield Economic Development Agency Downtown Urban Renewal District. Fire Local Option Levy – This fund accounts for revenue received from a five-year Fire Local Option Levy to restore staffing to Fire Station #3.

131

132

Special Transient Community SEDA SEDARevenue Room Tax Development Building Glenwood Downtown Fire Levy Total

ASSETSCash and investments 1,149,748$ 1,255,464$ 17,883$ 2,303,629$ 5,988,161$ 310,166$ 637,141$ 11,662,192$ Receivables:

Accounts 16,755 285,466 - - 31,500 - - 333,721 Taxes - - - - 51,909 24,840 110,490 187,239 Grants 28,122 - 112,628 - - - - 140,750 Accrued interest - 3,627 - 7,578 11,750 451 2,274 25,680 Notes - - 1,375,901 - - - - 1,375,901 Deferred system development fees - - - 25 - - - 25

Total assets 1,194,625$ 1,544,557$ 1,506,412$ 2,311,232$ 6,083,320$ 335,457$ 749,905$ 13,725,508$


Accounts payable 25,835$ 151,066$ 12,766$ 911$ 27,858$ 18,995$ 173,805$ 411,236$ Accrued payroll and other

liabilities - 5,597 5,865 20,307 - - 27,035 58,804 Deposits - - - - - 1,500 - 1,500

Total liabilities 25,835 156,663 18,631 21,218 27,858 20,495 200,840 471,540

Deferred inflows of resources:Unavailable revenue 16,756 176,063 1,375,901 25 83,409 24,840 110,490 1,787,484

Fund balances:Restricted 721,623 1,211,831 111,880 2,289,989 5,972,053 290,122 438,575 11,036,073 Assigned 430,411 - - - - - - 430,411

Total fund balances 1,152,034 1,211,831 111,880 2,289,989 5,972,053 290,122 438,575 11,466,484

Total liabilities, deferred inflows ofresources, and fund balances 1,194,625$ 1,544,557$ 1,506,412$ 2,311,232$ 6,083,320$ 335,457$ 749,905$ 13,725,508$


NONMAJOR SPECIAL REVENUE FUNDSCOMBINING BALANCE SHEET

June 30, 2018

133

Special Transient Community SEDA SEDARevenue Room Tax Development Building Glenwood Downtown Fire Levy Total

Revenues:Taxes -$ 1,377,810$ -$ -$ 895,863$ 522,000$ 1,570,073$ 4,365,746$ Licenses, permits and fees - - - - - 51,515 - 51,515 Intergovernmental revenue 423,101 - 374,511 - 4,395 273 - 802,280 Charges for services - - - 1,308,794 25,800 - - 1,334,594 Fines and forfeitures 88,566 - - - - 36,744 - 125,310 Investment earnings 5,373 13,679 - 28,560 44,577 1,289 7,844 101,322 Miscellaneous revenue 170,126 692 155,160 - - 897 - 326,875

Total revenues 687,166 1,392,181 529,671 1,337,354 970,635 612,718 1,577,917 7,107,642


City manager's office 34,777 293,255 - - 52,003 174,019 - 554,054 Finance - - 18,701 - 12,686 6,486 - 37,873 Fire and life safety - - - 58,098 - - 1,427,115 1,485,213 Police 80,563 - - - - - - 80,563 Library 96,075 61,712 - - - - - 157,787 Development and public works 4,249 109,760 423,441 1,067,340 - - - 1,604,790

Capital projects - - - - 101,672 - - 101,672 Debt service:

Principal - - - - 305,530 - - 305,530 Interest - - - - 75,057 - - 75,057

Total expenditures 215,664 464,727 442,142 1,125,438 546,948 180,505 1,427,115 4,402,539

Excess of revenues over(under) expenditures 471,502 927,454 87,529 211,916 423,687 432,213 150,802 2,705,103

Other financing sources (uses):Issuance of debt - - - - 2,729,248 - - 2,729,248 Transfers out - (613,794) - - - - - (613,794)

Total other financing sources (uses) - (613,794) - - 2,729,248 - - 2,115,454

Net change in fund balances 471,502 313,660 87,529 211,916 3,152,935 432,213 150,802 4,820,557

Fund balances, beginning of year 680,532 898,171 24,351 2,078,073 2,819,118 (142,091) 287,773 6,645,927

Fund balances, end of year 1,152,034$ 1,211,831$ 111,880$ 2,289,989$ 5,972,053$ 290,122$ 438,575$ 11,466,484$


COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCENONMAJOR SPECIAL REVENUE FUNDS


134


SPECIAL REVENUE FUNDSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE





Revenues:Intergovernmental revenue 133,080$ 327,991$ 423,350$ 95,359$ (249)$ 423,101$ Fines and forfeitures - - 88,566 88,566 - 88,566 Investment earnings - - 5,373 5,373 - 5,373 Miscellaneous revenue 106,500 111,931 170,126 58,195 - 170,126

Total revenues 239,580 439,922 687,415 247,493 (249) 687,166


City manager's office 30,730 170,730 34,777 135,953 - 34,777 Police 145,000 215,220 80,563 134,657 - 80,563 Library 58,081 106,778 96,075 10,703 - 96,075 Development and public works 12,000 12,000 4,249 7,751 - 4,249

Total expenditures 245,811 504,728 215,664 289,064 - 215,664

Net change in fund balances (6,231) (64,806) 471,751 536,557 (249) 471,502

Fund balance, beginning of year 627,549 680,283 680,283 - 249 680,532

Fund balance, end of year 621,318$ 615,477$ 1,152,034$ 536,557$ -$ 1,152,034$

135


TRANSIENT ROOM TAX FUNDSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE





Revenues:Taxes 1,412,225$ 1,412,225$ 1,377,810$ (34,415)$ -$ 1,377,810$ Investment earnings 3,000 3,000 12,513 9,513 1,166 13,679 Miscellaneous revenue - - 692 692 - 692

Total revenues 1,415,225 1,415,225 1,391,015 (24,210) 1,166 1,392,181


City manager's office 181,837 306,337 293,255 13,082 - 293,255 Library 60,949 152,302 61,712 90,590 - 61,712 Development and public works 112,167 112,167 109,760 2,407 - 109,760


Excess of revenues over(under) expenditures 1,060,272 844,419 926,288 81,869 1,166 927,454

Other financing sources (uses):Transfers out (784,570) (784,570) (613,794) 170,776 - (613,794)

Net change in fund balances 275,702 59,849 312,494 252,645 1,166 313,660

Fund balance, beginning of year 721,269 896,736 896,736 - 1,435 898,171


136


COMMUNITY DEVELOPMENT FUNDSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE





Revenues:Intergovernmental revenue 722,995$ 757,995$ 374,511$ (383,484)$ -$ 374,511$ Miscellaneous receipts 35,000 43,390 155,160 111,770 - 155,160

Total revenues 757,995 801,385 529,671 (271,714) - 529,671


Finance 25,231 25,231 18,701 6,530 - 18,701 Development and public works 732,764 776,154 423,441 352,713 - 423,441


Net change in fund balances - - 87,529 87,529 - 87,529

Fund balance, beginning of year 24,351 24,351 24,351 - - 24,351

Fund balance, end of year 24,351$ 24,351$ 111,880$ 87,529$ -$ 111,880$

137


BUILDING CODE FUNDSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE





Revenues:Charges for services 1,972,000$ 1,972,000$ 1,308,794$ (663,206)$ -$ 1,308,794$ Investment earnings 30,000 30,000 27,376 (2,624) 1,184 28,560

Total revenues 2,002,000 2,002,000 1,336,170 (665,830) 1,184 1,337,354


Fire and life safety 58,259 58,259 58,098 161 - 58,098 Development and public works 1,088,334 1,088,334 1,067,488 20,846 (148) 1,067,340

Total expenditures 1,146,593 1,146,593 1,125,586 21,007 (148) 1,125,438

Net change in fund balances 855,407 855,407 210,584 (644,823) 1,332 211,916


Fund balance, end of year 3,447,114$ 2,929,377$ 2,284,554$ (644,823)$ 5,435$ 2,289,989$

138


SEDA GLENWOOD FUNDSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE





Revenues:Taxes 920,463$ 920,463$ 895,863$ (24,600)$ -$ 895,863$ Intergovernmental revenue - - 4,395 4,395 - 4,395 Charges for services - - 25,800 25,800 - 25,800 Investment earnings 4,500 4,500 39,959 35,459 4,618 44,577

Total revenues 924,963 924,963 966,017 41,054 4,618 970,635


City manager's office 430,290 430,290 52,003 378,287 - 52,003 Finance 19,350 68,150 12,686 55,464 - 12,686

Capital projects 1,340,500 5,950,000 101,672 5,848,328 - 101,672 Debt service:

Principal 282,841 263,351 258,301 5,050 47,229 305,530 Interest 54,491 66,491 61,628 4,863 13,429 75,057

Total expenditures 2,127,472 6,778,282 486,290 6,291,992 60,658 546,948

Excess of revenues over (under)expenditures (1,202,509) (5,853,319) 479,727 6,333,046 (56,040) 423,687

Other financing sources (uses):Issuance of debt - 3,570,000 2,729,248 (840,752) - 2,729,248

Net change in fund balances (1,202,509) (2,283,319) 3,208,975 5,492,294 (56,040) 3,152,935


Fund balance, end of year 972,554$ 531,989$ 6,024,283$ 5,492,294$ (52,230)$ 5,972,053$

139


SEDA DOWNTOWN FUNDSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE





Revenues:Taxes 395,501$ 523,501$ 522,000$ (1,501)$ -$ 522,000$ Licenses, permits and fees 50,000 50,000 51,515 1,515 - 51,515 Intergovernmental revenue - - 273 273 - 273 Charges for services 18,900 18,900 - (18,900) - - Fines and forfeitures 30,000 30,000 36,744 6,744 - 36,744 Investment earnings 250 250 1,404 1,154 (115) 1,289 Miscellaneous revenue - - 897 897 - 897

Total revenues 494,651 622,651 612,833 (9,818) (115) 612,718


City manager's office 560,050 560,050 174,040 386,010 (21) 174,019 Finance 6,650 6,650 6,486 164 - 6,486

Debt service:Interest 10,500 - - - - -

Total expenditures 577,200 566,700 180,526 386,174 (21) 180,505

Excess of revenues over (under)expenditures (82,549) 55,951 432,307 376,356 (94) 432,213

Other financing sources (uses):Interfund loan proceeds 450,000 150,000 - (150,000) - - Interfund loan repaid (350,000) - - - - -

Total other financing sources (uses) 100,000 150,000 - (150,000) - -

Net change in fund balances 17,451 205,951 432,307 226,356 (94) 432,213

Fund balance, beginning of year 24,980 (142,508) (142,508) - 417 (142,091)

Fund balance, end of year 42,431$ 63,443$ 289,799$ 226,356$ 323$ 290,122$

140


SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE(NONGAAP BUDGETARY BASIS) - BUDGET AND ACTUAL




Revenues:Taxes 1,548,546$ 1,548,546$ 1,570,073$ 21,527$ -$ 1,570,073$ Investment earnings 4,500 4,500 7,554 3,054 290 7,844

Total revenues 1,553,046 1,553,046 1,577,627 24,581 290 1,577,917


Fire and life safety 1,432,873 1,432,873 1,427,840 5,033 (725) 1,427,115

Net change in fund balances 120,173 120,173 149,787 29,614 1,015 150,802


Fund balance, end of year 336,462$ 407,330$ 436,944$ 29,614$ 1,631$ 438,575$

FIRE LOCAL OPTION LEVY

141

142

Debt Service Funds Combining statements for all individual nonmajor debt service funds are reported here. The combined totals are reported in the combining nonmajor governmental fund statements. The City has no major debt service funds. Schedules of revenues, expenses, and changes in fund balance – budget and actual are presented here for each individual debt service fund. Nonmajor Debt Service Funds: General Obligation Debt Service Fund – This fund is used to account for payments on all general obligation debt, except for debt secured by assessment liens. Ad valorem property taxes are levied to make the debt service payments. Bancroft Redemption Fund – This fund is used to account for all assessments financed at the election of property owners under the State Bancroft Bonding Act.

143

144


NONMAJOR DEBT SERVICE FUNDSCOMBINING BALANCE SHEET

June 30, 2018

GeneralObligation Bancroft

Debt Service Redemption TotalASSETS

Cash and investments 381,857$ 5,011$ 386,868$ Receivables:

Property taxes 260,556 - 260,556 Accrued interest 4,067 121 4,188 Assessments and liens - 1,969 1,969

Total assets 646,480$ 7,101$ 653,581$


Accounts and refunds payable 3,412$ -$ 3,412$

Deferred inflows of resources:Unavailable revenue 260,556 1,969 262,525

Fund balances:Restricted 382,512 - 382,512 Assigned - 5,132 5,132

Total fund balances 382,512 5,132 387,644 Total liabilities, deferred inflows of

resources, and fund balances 646,480$ 7,101$ 653,581$

145


NONMAJOR DEBT SERVICE FUNDSCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES


GeneralObligation Bancroft

Debt Service Redemption TotalRevenues:

Taxes 1,817,739$ 110$ 1,817,849$ Investment earnings 13,953 448 14,401

Total revenues 1,831,692 558 1,832,250

Expenditures:Debt service:

Principal 1,390,000 - 1,390,000 Interest 578,600 - 578,600

Total expenditures 1,968,600 - 1,968,600

Excess of revenues over (under) expenditures (136,908) 558 (136,350)

Other financing sources (uses):Transfers out - (30,000) (30,000)

Net change in fund balances (136,908) (29,442) (166,350)

Fund balances, beginning of year 519,420 34,574 553,994

Fund balances, end of year 382,512$ 5,132$ 387,644$

146


GENERAL OBLIGATION DEBT SERVICE FUNDSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE



AdjustmentsBudget to Budget GAAP

Original Revised Basis Basis BasisBudget Budget Actual Variance Actual Actual

Revenues:Taxes 1,799,579$ 1,799,579$ 1,817,739$ 18,160$ -$ 1,817,739$ Investment earnings 4,000 4,000 13,915 9,915 38 13,953

Total revenues 1,803,579 1,803,579 1,831,654 28,075 38 1,831,692

Expenditures:Debt service:

Principal 1,390,000 1,390,000 1,390,000 - - 1,390,000 Interest 578,602 578,602 578,600 2 - 578,600

Total expenditures 1,968,602 1,968,602 1,968,600 2 - 1,968,600

Net change in fund balances (165,023) (165,023) (136,946) 28,077 38 (136,908)


Fund balance, end of year 349,069$ 351,518$ 379,595$ 28,077$ 2,917$ 382,512$

147


BANCROFT REDEMPTION FUNDSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE





Revenues:Taxes -$ -$ 110$ 110$ -$ 110$ Investment earnings 525 525 466 (59) (18) 448

Total revenues 525 525 576 51 (18) 558


Finance 2,000 2,000 - 2,000 - -

Excess of revenues over(under) expenditures (1,475) (1,475) 576 2,051 (18) 558

Other financing sources (uses):Transfers out - (30,000) (30,000) - - (30,000)

Total other financing sources (uses) - (30,000) (30,000) - - (30,000)

Net change in fund balances (1,475) (31,475) (29,424) 2,051 (18) (29,442)


Fund balance, end of year 50,216$ 2,994$ 5,045$ 2,051$ 87$ 5,132$

148

Capital Projects Funds The City has four nonmajor capital projects funds. The combining Balance Sheet and the combining Statement of Revenues, Expenditures and Changes in Fund Balance for these funds are presented here. The combined totals are reported on the combining nonmajor governmental fund statements. Schedules of revenues, expenses, and changes in fund balance – budget and actual are presented here for each individual capital projects fund. Nonmajor Capital Projects Funds: Development Assessments Capital Projects Fund – This fund is used to account for costs of constructing public improvements. Financing is provided by assessing benefiting property owners. Development Capital Projects Fund – This fund is used to account for costs of constructing and improving City-owned buildings and for infrastructure projects with shared funding. Financing is provided by grants, contracts, intergovernmental revenues, and other non-recurring revenues. SEDA Glenwood Capital Projects Fund – This fund is used to account for capital projects undertaken by the Springfield Economic Development Agency in Glenwood. Tax increment financing is in place. Street Capital Projects Fund – This fund accounts for public transportation capital improvement costs and local capacity-increasing public transportation improvements. Financing is provided by transfers from the Street Fund, interest on investments, and system development charges.

149

150

Development SEDAAssessments Development Glenwood Street

Capital Capital Capital CapitalProjects Projects Projects Projects Total

ASSETSCash and investments 531,723$ 3,836,665$ 233$ 2,987,789$ 7,356,410$ Receivables:

Accounts - - - 4,809 4,809 Accrued interest 1,871 19,690 - 9,229 30,790 Assessments and liens 77,748 - - - 77,748 Notes - 370,584 - - 370,584 Deferred system development fees - - - 644,393 644,393

Prepaids - 1,016 - - 1,016

Total assets 611,342$ 4,227,955$ 233$ 3,646,220$ 8,485,750$


Accounts payable -$ 102,113$ -$ 756$ 102,869$ Accrued payroll and other liabilities 1,025 - - - 1,025

Total liabilities 1,025 102,113 - 756 103,894

Deferred inflows of resources:Unavailable revenue 77,748 377,069 - 649,203 1,104,020

Fund balances:Nonspendable - 1,016 - - 1,016 Restricted - 1,595,051 233 2,996,261 4,591,545 Committed 532,569 1,668,173 - - 2,200,742 Assigned - 484,533 - - 484,533

Total fund balances 532,569 3,748,773 233 2,996,261 7,277,836

Total liabilities, deferred inflows ofresources, and fund balances 611,342$ 4,227,955$ 233$ 3,646,220$ 8,485,750$


NONMAJOR CAPITAL PROJECTS FUNDSBALANCE SHEET

June 30, 2018

151

Development SEDAAssessments Development Glenwood Street

Capital Capital Capital CapitalProjects Projects Projects Projects Total

Revenues:Charges for services -$ 276,492$ -$ 1,069,716$ 1,346,208$ Investment earnings 8,046 63,882 - 34,271 106,199 Special assessments 13,082 - - - 13,082 Miscellaneous revenue - 116,403 - 1,101 117,504

Total revenues 21,128 456,777 - 1,105,088 1,582,993


General government 36,934 - - - 36,934 Development and public works - - - 148,585 148,585

Capital projects - 273,861 - 591,637 865,498

Total expenditures 36,934 273,861 - 740,222 1,051,017

Excess of revenues over(under) expenditures (15,806) 182,916 - 364,866 531,976

Other financing sources (uses):Transfer in - 39,250 - - 39,250 Transfer out - (85,538) - - (85,538)

Total other financing sources (uses) - (46,288) - - (46,288)

Net change in fund balances (15,806) 136,628 - 364,866 485,688

Fund balance, beginning of year 548,375 3,612,145 233 2,631,395 6,792,148

Fund balance, end of year 532,569$ 3,748,773$ 233$ 2,996,261$ 7,277,836$


NONMAJOR CAPITAL PROJECTS FUNDS


STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

152


DEVELOPMENT ASSESSMENTS CAPITAL PROJECTS FUNDSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE





Revenues:Investment earnings 6,800$ 6,800$ 8,409$ 1,609$ (363)$ 8,046$ Special assessments 20,200 20,200 13,082 (7,118) - 13,082

Total revenues 27,000 27,000 21,491 (5,509) (363) 21,128


Finance 36,934 36,934 36,934 - - 36,934

Net change in fund balance (9,934) (9,934) (15,443) (5,509) (363) (15,806)


Fund balance, end of year 523,221$ 536,736$ 531,227$ (5,509)$ 1,342$ 532,569$

153


DEVELOPMENT CAPITAL PROJECTS FUNDSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE





Revenues:Charges for services 276,463$ 276,463$ 276,492$ 29$ -$ 276,492$ Investment earnings 45,109 45,109 62,878 17,769 1,004 63,882 Miscellaneous revenue 116,404 116,404 116,403 (1) - 116,403

Total revenues 437,976 437,976 455,773 17,797 1,004 456,777

Expenditures:Capital projects 400,000 538,516 270,024 268,492 3,837 273,861

Excess of revenues over(under) expenditures 37,976 (100,540) 185,749 286,289 (2,833) 182,916

Other financing sources (uses):Interfund loans issued (450,000) (1,100,000) - 1,100,000 - - Transfer in 350,000 389,250 39,250 (350,000) - 39,250 Transfer out (85,538) (85,538) (85,538) - - (85,538)

Total other financing sources (uses) (185,538) (796,288) (46,288) 750,000 - (46,288)

Net change in fund balances (147,562) (896,828) 139,461 1,036,289 (2,833) 136,628


Fund balance, end of year 3,589,145$ 2,706,850$ 3,743,139$ 1,036,289$ 5,634$ 3,748,773$

154


SEDA GLENWOOD CAPITAL PROJECTSSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE





Fund balance, beginning of year -$ -$ 233$ 233$ -$ 233$

Fund balance, end of year -$ -$ 233$ 233$ -$ 233$

155


STREET CAPITAL PROJECTS FUNDSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE





Revenues:33,900$ 33,900$ 35,512$ 1,612$ (1,241)$ 34,271$

Charges for services 840,000 840,000 1,072,826 232,826 (3,110) 1,069,716 Miscellaneous revenue - - 1,101 1,101 - 1,101

Total revenues 873,900 873,900 1,109,439 235,539 (4,351) 1,105,088

Expenditures:Current operating

Development and public works 148,585 148,585 148,585 - - 148,585 Capital projects 1,522,945 1,874,945 597,666 1,277,279 (6,029) 591,637

Total expenditures 1,671,530 2,023,530 746,251 1,277,279 (6,029) 740,222

Net change in fund balance (797,630) (1,149,630) 363,188 1,512,818 1,678 364,866

2,695,247 2,626,454 2,626,454 - 4,941 2,631,395

1,897,617$ 1,476,824$ 2,989,642$ 1,512,818$ 6,619$ 2,996,261$

Investment earnings

Fund balance, beginning of year

Fund balance, end of year

156

Enterprise Funds Combining statements for all individual nonmajor enterprise funds are reported in this section. Fund statements for major enterprise funds are reported in the basic financial statements. Schedules of revenues, expenses, and changes in fund net position – budget and actual are presented here for each individual enterprise fund. Major Enterprise Funds: Sewer Fund – This fund accounts for the operation, construction, and maintenance of the wastewater collection system. Primary revenues are sewer user fees and system development charges. Storm Drainage Fund – This fund accounts for the operation, construction, and maintenance of the stormwater drainage system. Primary revenues are storm drainage fees and system development charges. Ambulance Fund – This fund accounts for the City’s ambulance operations. Revenue sources include ambulance transport fees, ambulance billing services fees, and FireMed program memberships. Nonmajor Enterprise Funds: Booth-Kelly Fund – This fund accounts for the cost of managing and maintaining City-owned income properties. The primary revenue source is rental income.

157

158


SEWER FUNDSCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION





Revenues:Charges for services 7,456,200$ 7,456,200$ 7,688,027$ 231,827$ 21,609$ 7,709,636$ Investment earnings 118,800 118,800 261,894 143,094 5,474 267,368 Miscellaneous revenue - - 875 875 - 875

Total revenues 7,575,000 7,575,000 7,950,796 375,796 27,083 7,977,879

Expenses:Current operating:

Information technology 323,396 358,009 247,549 110,460 - 247,549 Development and public works 3,573,887 3,576,087 3,391,548 184,539 294,783 3,686,331 Finance 14,751 14,751 14,737 14 - 14,737

Debt service:Principal 1,045,000 1,045,000 1,320,000 (275,000) (1,320,000) - Interest 663,933 663,933 385,084 278,849 47,452 432,536

Capital projects 3,671,013 4,480,013 1,405,204 3,074,809 (1,405,204) - Depreciation - - - - 2,778,605 2,778,605

Total expenses 9,291,980 10,137,793 6,764,122 3,373,671 395,636 7,159,758

Excess of revenues over(under) expenses (1,716,980) (2,562,793) 1,186,674 3,749,467 (368,553) 818,121

Other financing sources (uses):Capital contributions 970,000 970,000 776,698 (193,302) 148,055 924,753

Change in net position (746,980) (1,592,793) 1,963,372 3,556,165 (220,498) 1,742,874

Net position, beginning of year 21,651,015 20,121,177 20,121,177 - 45,870,948 65,992,125

Prior period adjustment (Note Q) - - - - (5,120) (5,120)

Net position, beginning of year, as restated 21,651,015 20,121,177 20,121,177 - 45,865,828 65,987,005

Net position, end of year 20,904,035$ 18,528,384$ 22,084,549$ 3,556,165$ 45,645,330$ 67,729,879$

159


STORM DRAINAGE FUNDSCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION





Revenues:Charges for services 6,835,750$ 6,835,750$ 7,168,634$ 332,884$ 25,993$ 7,194,627$ Investment earnings 117,400 117,400 217,396 99,996 1,281 218,677 Miscellaneous revenue 25,000 25,000 15,587 (9,413) 183,470 199,057

Total revenues 6,978,150 6,978,150 7,401,617 423,467 210,744 7,612,361


Information technology 250,871 277,573 187,003 90,570 - 187,003 Development and public works 5,118,324 5,119,297 4,809,015 310,282 471,236 5,280,251 Finance 14,750 14,750 14,715 35 - 14,715

Debt service:Principal 435,000 435,000 435,000 - (435,000) - Interest 271,327 271,327 271,325 2 (29,316) 242,009

Capital projects 4,810,037 5,002,037 1,148,659 3,853,378 (1,148,659) - Depreciation - - - - 505,728 505,728

Total expenses 10,900,309 11,119,984 6,865,717 4,254,267 (636,011) 6,229,706

Excess of revenues over(under) expenses (3,922,159) (4,141,834) 535,900 4,677,734 846,755 1,382,655

Other financing sources (uses):Capital contributions 310,000 310,000 225,459 (84,541) 14,549 240,008

Change in net position (3,612,159) (3,831,834) 761,359 4,593,193 861,304 1,622,663

Net position, beginning of year, as originally stated 15,583,249 16,983,142 16,983,142 - 2,645,088 19,628,230

Prior period adjustment (Note Q) - - - - 427,785 427,785

Net position, beginning of year, as restated 15,583,249 16,983,142 16,983,142 - 3,072,873 20,056,015

Net position, end of year 11,971,090$ 13,151,308$ 17,744,501$ 4,593,193$ 3,934,177$ 21,678,678$

160


AMBULANCE FUNDSCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION





Revenues:Charges for services 6,065,000$ 6,065,000$ 5,066,308$ (998,692)$ 9,927,045$ 14,993,353$ Less: Contractual adjustments - - - - (9,963,729) (9,963,729) Intergovernmental revenue 200,000 200,000 337,547 137,547 16,589 354,136 Investment earnings - - 28,078 28,078 41 28,119 Miscellaneous revenue 7,000 7,000 8,771 1,771 - 8,771

Total revenues 6,272,000 6,272,000 5,440,704 (831,296) (20,054) 5,420,650


Fire and life safety 5,878,557 6,084,557 6,084,457 100 345,356 6,429,813 Depreciation - - - - 8,390 8,390

Total expenses 5,878,557 6,084,557 6,084,457 100 353,746 6,438,203

Excess of revenues over(under) expenses 393,443 187,443 (643,753) (831,196) (373,800) (1,017,553)

Other financing sources (uses):Transfer out (250,000) (250,000) - 250,000 - -

Total other financing sources (uses) (250,000) (250,000) - 250,000 - -

Change in net position 143,443 (62,557) (643,753) (581,196) (373,800) (1,017,553)

Net position, beginning of year as originally stated 2,226,923 2,354,999 2,354,999 - (2,721,318) (366,319)


Net position, beginning of year, as restated 2,226,923 2,354,999 2,354,999 - (2,787,933) (432,934)

Net position, end of year 2,370,366$ 2,292,442$ 1,711,246$ (581,196)$ (3,161,733)$ (1,450,487)$

161


BOOTH-KELLY FUNDSCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION





Revenues:Charges for services 1,575,732$ 1,575,832$ 1,625,562$ 49,730$ 5,202$ 1,630,764$ Investment earnings 8,000 8,000 13,335 5,335 751 14,086 Miscellaneous revenue - - 1,000 1,000 - 1,000

Total revenues 1,583,732 1,583,832 1,639,897 56,065 5,953 1,645,850


Development and public works 636,652 636,652 487,208 149,444 3,435 490,643 Capital projects 276,000 276,000 - 276,000 - - Debt service:

Principal 754,687 754,687 754,687 - (754,687) - Interest 80,345 80,445 80,393 52 (4,383) 76,010

Depreciation - - - - 843,967 843,967

Total expenses 1,747,684 1,747,784 1,322,288 425,496 88,332 1,410,620

Excess of revenues over(under) expenses (163,952) (163,952) 317,609 481,561 (82,379) 235,230

Other financing sources (uses):Transfers out (63,000) (63,000) (63,000) - - (63,000)

Total other financing sources (uses) (63,000) (63,000) (63,000) - - (63,000)

Change in net position (226,952) (226,952) 254,609 481,561 (82,379) 172,230

Net position, beginning of year as originally stated 886,434 992,095 992,095 - 4,108,687 5,100,782

Prior period adjustment (Note Q) - - - - 5,644 5,644

Net position, beginning of year, as restated 886,434 992,095 992,095 - 4,114,331 5,106,426

Net position, end of year 659,482$ 765,143$ 1,246,704$ 481,561$ 4,031,952$ 5,278,656$

162

Internal Service Funds Combining statements for all internal service funds are reported here. The combined totals are reported alongside the individual enterprise funds in the basic financial statements. Schedules of revenues, expenses, and changes in fund net position – budget and actual are presented here for each individual internal service fund. Vehicle and Equipment Fund – This fund accounts for the ownership and use of major equipment. Resources are provided by charges to other City funds. Insurance Fund – This fund accounts for the accumulation of resources to provide for the City’s insurance, the worker’s compensation program, and the employee benefits programs. Resources are provided by charges to other City funds. SDC Administration Fund – This fund accounts for the activities required to administer the City’s various system development charges. Resources are provided primarily by charges to other City funds.

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164


INTERNAL SERVICE FUNDSCOMBINING STATEMENT OF FUND NET POSITION

Vehicleand SDC

Equipment Insurance Administration TotalASSETS

Current assets:Cash and investments 8,515,903$ 10,500,985$ 853,146$ 19,870,034$ Prepaids 20,812 75,627 - 96,439 Deposits - 200,000 - 200,000 Accounts receivable 43,426 10,725 8,077 62,228 Accrued interest receivable 28,447 35,739 2,786 66,972 Deferred system development fees - - 61,130 61,130 Inventory 26,611 - - 26,611

Total current assets 8,635,199 10,823,076 925,139 20,383,414

Noncurrent assetsCapital assets

Machinery and equipment 19,058,934 - - 19,058,934 Less accumulated depreciation (13,196,222) - - (13,196,222)

Total noncurrent assets 5,862,712 - - 5,862,712

Total assets 14,497,911 10,823,076 925,139 26,246,126

DEFERRED OUTFLOWS OF RESOURCESDeferred pension outflow - 106,350 112,427 218,777 Deferred OPEB outflow - 6,652 5,826 12,478

Total deferred outflows - 113,002 118,253 231,255

LIABILITIESCurrent liabilities:

Accounts payable 201,102 912,095 1,059 1,114,256 Accrued interest payable 2,146 - - 2,146 Capital lease obligation, current portion 143,635 - - 143,635 Accrued claims liabilities, current portion - 227,722 - 227,722 Accrued payroll and other

related liabilities - 248,200 7,912 256,112

Total current liabilities 346,883 1,388,017 8,971 1,743,871

Noncurrent liabilities:Accrued absence payable - 8,778 - 8,778 Capital lease obligation, less current portion 297,355 - - 297,355 Accrued claims liabilities, less current portion - 480,278 - 480,278 Net pension liability - 288,074 304,536 592,610 Net OPEB obligation - 39,050 32,729 71,779

Total noncurrent liabilities 297,355 816,180 337,265 1,450,800

Total liabilities 644,238 2,204,197 346,236 3,194,671

DEFERRED INFLOWS OF RESOURCESDeferred pension inflow - 10,692 11,303 21,995 Deferred OPEB Inflow - 7,237 6,186 13,423

Total deferred inflows - 17,929 17,489 35,418

NET POSITIONNet investment in capital assets 5,421,722 - - 5,421,722 Unrestricted 8,431,951 8,713,952 679,667 17,825,570

Total net position 13,853,673$ 8,713,952$ 679,667$ 23,247,292$

June 30, 2018

165

City of Springfield, OregonINTERNAL SERVICE FUNDS

COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION


Vehicleand SDC

Equipment Insurance Administration TotalOperating revenues:

Charges for services 2,225,534$ 9,680,712$ 382,979$ 12,289,225$ Licenses and permits - - 144,089 144,089 Miscellaneous revenue - 115,448 - 115,448

Total operating revenues 2,225,534 9,796,160 527,068 12,548,762

Operating expenses:Current operating:

Human resources 3,000 9,766,654 - 9,769,654 Finance 6,970 - 21,610 28,580 Information technology 224,107 - 50,402 274,509 Library 6,441 - - 6,441 Fire and life safety 107,650 - - 107,650 Police 13 - - 13 Development and public works 479,609 - 390,548 870,157

Depreciation 1,271,223 - - 1,271,223

Total operating expenses 2,099,013 9,766,654 462,560 12,328,227

Operating income 126,521 29,506 64,508 220,535

Nonoperating revenues (expenses):Interest income 106,683 134,387 10,316 251,386 Interest expense (13,315) - - (13,315) Gain on disposition of equipment 77,436 - - 77,436

Total nonoperating revenues (expenses) 170,804 134,387 10,316 315,507

Income before capital contributions and transfers 297,325 163,893 74,824 536,042

Transfers out (5,290) - - (5,290) Capital contributions 6,958 - - 6,958

Change in net position 298,993 163,893 74,824 537,710

Net position, beginning of year, as originally stated 13,638,868 8,552,055 612,717 22,803,640

Prior period adjustment (Note Q) (84,188) (1,996) (7,874) (94,058)

Net position, beginning of year, as restated 13,554,680 8,550,059 604,843 22,709,582

Net position, end of year 13,853,673$ 8,713,952$ 679,667$ 23,247,292$

166


COMBINING STATEMENT OF CASH FLOWS Year Ended June 30, 2018

Vehicleand SDC

Equipment Insurance Administration TotalCash flows from operating activities: Cash received from interfund services provided 2,191,879$ 9,669,987$ 363,759$ 12,225,625$ Cash paid for employee services - (341,600) (326,796) (668,396) Cash paid to suppliers for goods and services (914,831) (9,437,396) (114,934) (10,467,161) Other operating receipts - 115,448 144,089 259,537

Net cash provided by operating activities 1,277,048 6,439 66,118 1,349,605

Cash flows from noncapital financing activities: Transfers to other funds (5,290) - - (5,290)

Cash flows from capital and related financing activities: Acquisition of capital assets (688,256) - - (688,256) Disposition of capital assets 108,263 - - 108,263 Principal paid on long-term debt (348,059) - - (348,059) Interest paid (19,426) - - (19,426)

Net cash used in capital and related financing activities (947,478) - - (947,478)

Cash flows from investing activities: Interest received 109,262 137,132 9,720 256,114

Net change in cash and investments 433,542 143,571 75,838 652,951 Cash and investments, beginning of year 8,082,361 10,357,414 777,308 19,217,083

Cash and investments, end of year 8,515,903$ 10,500,985$ 853,146$ 19,870,034$

Reconciliation of operating loss to net cash provided by (used in) operating activities:

Operating income 126,521$ 29,506$ 64,508$ 220,535$ Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 1,271,223 - - 1,271,223 Changes in assets and liabilities: Prepaids (20,812) (6,713) - (27,525) Accounts receivable (33,655) (10,725) (19,220) (63,600) Deposits - 65,500 - 65,500 Inventory 6,657 - - 6,657 Net pension liability and related deferrals - (28,073) 28,748 675 Accounts payable (72,886) (130,811) (5,808) (209,505) Accrued payroll and other liabilities - 30,559 487 31,046 Accrued claims liabilities - 60,000 - 60,000 Net OPEB obligation and related deferrals - (2,804) (2,597) (5,401)

Net cash provided by operating activities 1,277,048$ 6,439$ 66,118$ 1,349,605$

INTERNAL SERVICE FUNDS

167

City of Springfield, OregonVEHICLE AND EQUIPMENT FUND

SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION(NONGAAP BUDGETARY BASIS) - BUDGET AND ACTUAL




Revenues:Charges for services 2,364,639$ 2,212,971$ 2,224,316$ 11,345$ 1,218$ 2,225,534$ Investment earnings 75,000 75,000 104,283 29,283 2,400 106,683 Miscellaneous revenue - 1,937 157,160 155,223 (157,160) -

Total revenues 2,439,639 2,289,908 2,485,759 195,851 (153,542) 2,332,217


Legal services 900 900 - 900 - - Human resources - 3,000 3,000 - - 3,000 Finance 12,000 12,000 6,970 5,030 - 6,970 Information technology 258,831 305,710 250,379 55,331 (26,272) 224,107 Library 8,000 8,000 6,441 1,559 - 6,441 Fire and life safety 192,800 192,800 168,513 24,287 (60,863) 107,650 Police 170,000 293,000 247,140 45,860 (247,127) 13 Development and public works 839,213 1,121,180 917,790 203,390 (438,181) 479,609

Debt service:Principal 348,060 348,060 348,059 1 (348,059) - Interest 19,425 19,425 19,425 - (6,110) 13,315

Depreciation - - - - 1,271,223 1,271,223

Total expenses 1,849,229 2,304,075 1,967,717 336,358 144,611 2,112,328

Excess of revenues over(under) expenses 590,410 (14,167) 518,042 532,209 (298,153) 219,889

Other financing sources (uses):Gain on disposal of assets - - - - 77,436 77,436 Assets contributed by other funds - - - - 6,958 6,958 Transfers out - - - - (5,290) (5,290)

Total other financing sources (uses) - - - - 79,104 79,104

Change in net position 590,410 (14,167) 518,042 532,209 (219,049) 298,993

Net position, beginning of year 7,150,736 7,864,434 7,864,434 - 5,774,434 13,638,868 as originally stated


Net position, beginning of year, as restated 7,864,434 - 5,690,246 13,554,680

Net position, end of year 7,741,146$ 7,850,267$ 8,382,476$ 532,209$ 5,471,197$ 13,853,673$

168

City of Springfield, OregonINSURANCE FUND





Revenues:Charges for services 20,257,154$ 20,257,154$ 19,542,320$ (714,834)$ (9,861,608)$ 9,680,712$ Investment earnings 65,000 65,000 131,084 66,084 3,303 134,387 Miscellaneous revenue 90,000 95,147 170,224 75,077 (54,776) 115,448

Total revenues 20,412,154 20,417,301 19,843,628 (573,673) (9,913,081) 9,930,547


Human resources 1,318,192 1,323,339 1,263,002 60,337 966,279 2,229,281 Health insurance 7,912,027 7,912,027 7,079,161 832,866 458,212 7,537,373

Statutory payments 11,376,360 11,376,360 10,776,410 599,950 (10,776,410) -

Total expenses 20,606,579 20,611,726 19,118,573 1,493,153 (9,351,919) 9,766,654

Excess of revenues over(under) expenses (194,425) (194,425) 725,055 919,480 (561,162) 163,893


Net position, beginning of year, as originally stated 8,827,214 9,291,737 9,291,737 - (739,682) 8,552,055


Net position, beginning of year, as restated 8,827,214 9,291,737 9,291,737 - (741,678) 8,550,059

Net position, end of year 8,632,789$ 9,097,312$ 10,016,792$ 919,480$ (1,302,840)$ 8,713,952$

169

City of Springfield, OregonSDC ADMINISTRATION FUND





Revenues:Charges for services 375,000$ 375,000$ 383,339$ 8,339$ (360)$ 382,979$ Licenses and permits 75,000 75,000 124,509 49,509 19,580 144,089 Investment earnings 1,500 1,500 9,588 8,088 728 10,316

Total revenues 451,500 451,500 517,436 65,936 19,948 537,384


Information services 65,132 67,132 50,402 16,730 - 50,402 Finance 21,737 21,737 21,610 127 - 21,610 Development and public works 425,250 425,250 364,460 60,790 26,088 390,548

Total expenses 512,119 514,119 436,472 77,647 26,088 462,560


Net position, beginning of year as originally stated - - 763,997 763,997 (151,280) 612,717


Net position, beginning of year as restated 632,708 763,997 763,997 763,997 (159,154) 604,843

Net position, end of year 572,089$ 701,378$ 844,961$ 907,580$ (165,294)$ 679,667$

170

Fiduciary Funds Agency funds are used to account for assets held by the government as an agent for individuals, private organizations, and other governments. Statement of changes in assets and liabilities of the Agency Fund is presented here. Agency Fund – The Agency Fund is a non-budgeted fund which accounts for resources received and held by the City in a fiduciary capacity. Disbursements from this fund are made in accordance with the applicable agreements for each type of transaction. This fund is custodial in nature (assets equal liabilities) and does not involve measurement of the results of operations.

171

172

Beginning EndingBalance Additions Reductions Balance

ASSETSCash and investments 93,346,331$ 72,312,265$ (75,917,366)$ 89,741,230$

LIABILITIESAccounts payable 1,219,513$ 7,744,701$ (8,460,145)$ 504,069$ Health reimbursement account deposits 1,371,026 841,646 (803,768) 1,408,904 Ambulance billing deposits 251,378 14,176,767 (13,186,733) 1,241,412 Bail deposits 458,522 1,401,651 (1,340,050) 520,123 Miscellaneous deposits 597,375 2,485,676 (2,510,723) 572,328 Regional Fiber Consortium deposits 204,168 951,903 (921,551) 234,520 Metropolitan Wastewater Management Commission deposits 89,244,349 434,698,583 (438,683,058) 85,259,874

Total liabilities 93,346,331$ 462,300,927$ (465,906,028)$ 89,741,230$

STATEMENT OF CHANGES IN ASSETS AND LIABILITIESAGENCY FUND



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174

Statistical Section This part of the City of Springfield’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. Contents Page Financial Trends 179-183 These schedules contain trend information to help the reader understand how

the City’s financial performance and well-being have changed over time. Revenue Capacity 187-190 These schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax. Debt Capacity 193-197 These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. Demographic and Economic Information 201-202 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. Operating Information 205-207 These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the

services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

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176

Financial Trend Information

177

178

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Governmental activities

Net investment in capital assets 99,380,714$ 107,712,593$ 109,751,002$ 108,631,529$ 108,731,315$ 107,219,252$ 112,632,832$ 115,176,581$ 122,230,625$ 120,175,702$ Restricted 5,956,816 5,268,152 12,102,762 11,424,559 13,171,125 14,144,006 18,977,155 17,357,721 17,295,648 22,674,644 Unrestricted 33,973,864 29,581,397 20,196,736 21,514,015 19,835,794 20,240,783 4,394,678 (5,988,448) (11,706,242) (15,369,959)

Total governmental activities net position 139,311,394$ 142,562,142$ 142,050,500$ 141,570,103$ 141,738,234$ 141,604,041$ 136,004,665$ 126,545,854$ 127,820,031$ 127,480,387$

Business-type activitiesNet investment in capital assets 47,004,701$ 48,338,342$ 51,248,289$ 57,872,702$ 51,972,745$ 54,491,005$ 52,836,347$ 54,212,835$ 54,802,364$ 55,901,549$ Restricted 3,447,456 2,989,453 3,091,423 3,236,454 3,273,179 3,072,205 3,348,526 3,976,909 4,733,337 5,457,331 Unrestricted 9,478,068 12,562,982 15,019,532 13,474,770 22,668,331 23,137,298 27,590,908 28,145,472 31,242,641 32,027,245

Total business-type activities net position 59,930,225$ 63,890,777$ 69,359,244$ 74,583,926$ 77,914,255$ 80,700,508$ 83,775,781$ 86,335,216$ 90,778,342$ 93,386,125$

Primary governmentNet investment in capital assets 146,385,415$ 156,050,935$ 165,468,108$ 166,504,231$ 160,704,060$ 161,710,257$ 165,469,179$ 169,389,416$ 177,032,989$ 176,077,251$ Restricted 9,404,272 8,257,605 15,194,185 14,661,013 16,444,304 17,216,211 22,325,681 21,334,630 22,028,985 28,131,975 Unrestricted 43,451,932 42,144,379 35,216,268 34,988,785 42,504,125 43,378,081 31,985,586 22,157,024 19,536,399 16,657,286

Total primary government net position 199,241,619$ 206,452,919$ 215,878,561$ 216,154,029$ 219,652,489$ 222,304,549$ 219,780,446$ 212,881,070$ 218,598,373$ 220,866,512$

City of Springfield, OregonNet Position by Component

Last Ten Fiscal Years(accrual basis of accounting)

Fiscal Year

179

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018ExpensesGovernmental activities:

General government 4,791,069$ 3,560,757$ 5,386,231$ 4,724,454$ 5,932,778$ 4,928,452$ 5,194,119$ 8,055,900$ 8,105,716$ 7,450,495$ Fire and life safety 10,858,907 10,691,161 11,760,498 11,847,128 11,340,166 11,736,970 9,905,694 14,789,977 13,351,001 13,890,821 Police 13,974,177 17,259,569 18,444,853 19,694,617 19,561,178 20,708,780 18,007,975 26,060,501 22,068,423 22,233,956 Library 1,400,056 1,382,782 1,513,148 1,519,866 1,515,697 1,508,178 1,477,854 2,131,183 1,981,508 1,727,501 Development and public works 14,896,444 13,560,283 12,804,723 11,384,695 11,658,254 11,925,811 10,605,607 15,857,538 12,483,443 12,687,939 Depreciation, unallocated 313,042 283,227 283,227 284,439 297,774 270,618 270,619 250,942 250,435 250,435 Interest on long-term debt 1,406,144 1,373,371 1,301,309 1,220,457 1,143,393 1,027,212 909,122 744,674 518,495 457,480

Total governmental activities expense 47,639,839 48,111,150 51,493,989 50,675,656 51,449,240 52,106,021 46,370,990 67,890,715 58,759,021 58,698,627 Business-type activities:

Sanitary sewer 6,619,628 4,803,431 4,886,099 5,190,475 6,155,571 6,848,708 6,340,495 7,523,149 7,158,008 7,269,835 Storm drainage 3,894,947 3,956,135 4,031,641 3,843,225 3,984,400 4,407,437 4,259,913 5,982,172 5,559,128 6,316,516 Booth Kelly 779,773 1,433,965 1,334,099 1,430,803 1,463,621 1,611,902 1,649,088 1,507,253 1,424,527 1,410,609 Ambulance 4,939,277 5,000,748 5,202,146 5,184,271 4,948,503 5,525,464 5,082,272 7,073,633 6,574,936 6,515,453

Business-type activities expenses 16,233,625 15,194,279 15,453,985 15,648,774 16,552,095 18,393,511 17,331,768 22,086,207 20,716,599 21,512,413 Total primary government expenses 63,873,464$ 63,305,429$ 66,947,974$ 66,324,430$ 68,001,335$ 70,499,532$ 63,702,758$ 89,976,922$ 79,475,620$ 80,211,040$

Program RevenueGovermental activities:

Charges for services:General government 2,403,988$ 1,940,273$ 3,360,519$ 3,759,347$ 3,874,817$ 3,766,791$ 3,868,870$ 3,888,018$ 4,078,095$ 4,248,830$ Fire and life safety 1,677,216 1,716,417 1,725,642 1,764,798 1,769,064 1,874,473 1,809,091 1,921,748 1,984,859 1,916,552 Police 490,731 246,682 513,759 529,998 493,254 429,497 408,750 346,629 422,625 715,863 Library 89,853 103,475 97,718 99,186 105,329 102,737 125,482 106,200 120,912 117,114 Development and public works 3,613,290 2,168,001 1,544,638 1,749,513 2,263,872 2,054,066 2,710,606 3,420,717 2,884,311 2,626,049

Operating grants and contributions 4,161,206 6,436,204 5,616,572 5,514,649 4,428,156 5,039,850 4,444,185 4,184,978 4,954,592 5,135,869 Capital grants and contributions 155,634 3,994,233 3,661,254 1,109,866 2,192,135 481,598 9,934,788 4,841,296 4,085,842 2,177,260

Total governmental activities program revenues 12,591,918 16,605,285 16,520,102 14,527,357 15,126,627 13,749,012 23,301,772 18,709,586 18,531,236 16,937,537 Business-type activities:

Charges for services:Sanitary sewer 5,590,002 6,325,689 6,927,642 7,261,314 7,324,173 7,536,486 7,738,487 7,224,927 8,798,173 7,709,636 Storm drainage 4,475,347 4,984,732 5,694,208 5,789,080 6,032,530 6,347,901 6,613,264 6,892,114 7,408,192 7,194,627 Booth Kelly 788,095 1,381,649 1,443,802 1,412,841 1,348,308 1,355,337 1,412,722 1,532,687 1,537,293 1,630,764 Ambulance 4,662,981 4,834,330 5,173,527 4,849,894 5,255,068 5,612,386 6,119,908 6,599,690 6,046,048 5,383,760

Capital grants and contributions 385,165 1,001,635 1,129,770 1,448,360 16,729 16,848 199,269 2,088,254 1,033,069 1,164,761 Total business-type activities program revenues 15,901,590 18,528,035 20,368,949 20,761,489 19,976,808 20,868,958 22,083,650 24,337,672 24,822,775 23,083,548 Total primary government program revenues 28,493,508$ 35,133,320$ 36,889,051$ 35,288,846$ 35,103,435$ 34,617,970$ 45,385,422$ 43,047,258$ 43,354,011$ 40,021,085$ Net (Expense) RevenueGovernmental activities (35,047,921)$ (31,505,865)$ (34,973,887)$ (36,148,299)$ (36,322,613)$ (38,357,009)$ (23,069,218)$ (49,181,129)$ (40,227,785)$ (41,761,090)$ Business-type activities (332,035) 3,333,756 4,914,964 5,112,715 3,424,713 2,475,447 4,751,882 2,251,465 4,106,176 1,571,135Total primary government net expense (35,379,956)$ (28,172,109)$ (30,058,923)$ (31,035,584)$ (32,897,900)$ (35,881,562)$ (18,317,336)$ (46,929,664)$ (36,121,609)$ (40,189,955)$

Fiscal Year

City of Springfield, OregonChanges in Net Position, Last Ten Fiscal years

(accrual basis of accounting)

180

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018General Revenues and Other Changes in Net PositionGovernmental activities:

Taxes:Property taxes 24,888,500$ 26,616,211$ 25,890,066$ 27,056,405$ 27,891,748$ 28,735,713$ 30,497,567$ 29,449,109$ 30,691,286$ 30,910,303$ Room tax 771,994 679,566 777,085 901,665 973,830 1,070,722 1,219,497 1,373,464 1,445,031 1,553,872 Other taxes 3,391,158 3,088,825 3,018,549 2,744,424 2,754,883 3,158,101 3,288,462 3,387,888 3,446,975 3,567,850

Payment in lieu of taxes 2,275,036 2,346,889 2,373,660 2,358,273 2,375,949 2,390,734 2,404,859 2,392,729 2,353,365 2,414,018 Investment earnings 1,727,120 664,423 421,956 337,514 333,178 361,323 305,267 416,909 573,280 783,330 Miscellaneous 379,635 201,184 486,358 727,049 985,770 908,413 857,657 867,789 972,473 1,345,586 Gain (loss) on disposition of capital assets 19,810 (57,355) - - - - - 149,687 - - Shared revenue 1,377,642 1,247,546 1,387,527 1,400,459 1,460,463 1,533,466 1,579,978 1,584,743 2,019,553 1,743,533 Transfers 593,130 (30,673) 107,047 142,115 71,894 64,344 71,311 100,000 - 63,000

Total governmental activities 35,424,025 34,756,616 34,462,248 35,667,904 36,847,715 38,222,816 40,224,598 39,722,318 41,501,963 42,381,492 Business-type activities:

Investment earnings 559,713 409,360 292,416 237,091 211,730 282,238 162,671 227,641 317,398 528,250 Miscellaneous 120,051 186,763 368,134 16,990 78,204 92,912 446,106 180,329 19,552 209,703 Transfers (593,130) 30,673 (107,047) (142,115) (71,894) (64,344) (71,311) (100,000) - (63,000)

Total business-type activities 86,634 626,796 553,503 111,966 218,040 310,806 537,466 307,970 336,950 674,953 Total primary government 35,510,659$ 35,383,412$ 35,015,751$ 35,779,870$ 37,065,755$ 38,533,622$ 40,762,064$ 40,030,288$ 41,838,913$ 43,056,445$

Change In Net PositionGovernmental activities 3,918,160$ (217,271)$ (1,686,051)$ (654,709)$ (1,509,294)$ (134,193)$ 17,155,380$ (9,458,811)$ 1,274,178$ 620,402$ Business-type activities 3,420,390 5,541,760 5,666,218 3,536,679 2,693,487 2,786,253 5,289,348 2,559,435 4,443,126 2,246,088 Total primary government 7,338,550$ 5,324,489$ 3,980,167$ 2,881,970$ 1,184,193$ 2,652,060$ 22,444,728$ (6,899,376)$ 5,717,304$ 2,866,490$

1 This schedule reports using the accrual basis of accounting.2 Expenses include allocated indirect expenses.

Fiscal Year

181

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018General Fund

Reserved 388,528$ 10,546$ -$ -$ -$ -$ -$ -$ -$ -$ Unreserved 6,966,896 7,843,269 - - - - - - - - Nonspendable - - 5,420 5,589 49,644 22,109 86,584 98,292 83,602 64,408 Restricted - - 600,000 632 - - - - - - Committed - - 65,721 37,863 12,764 25,902 83,224 172,840 293,004 293,004 Assigned - - 39,224 600,000 600,000 600,000 600,000 600,000 1,000,000 1,000,000 Unassigned - - 6,872,613 7,134,387 7,538,441 7,698,382 8,553,497 7,999,863 7,387,428 8,388,052

Total general fund 7,355,424$ 7,853,815$ 7,582,978$ 7,778,471$ 8,200,849$ 8,346,393$ 9,323,305$ 8,870,995$ 8,764,034$ 9,745,464$

All Other Governmental FundsReserved 5,339,010$ 4,492,479$ -$ -$ -$ -$ -$ -$ -$ -$ Unreserved. reported in:

Special revenue funds 4,329,775 4,459,760 - - - - - - - - Capital projects funds 14,937,692 4,030,636 - - - - - - - - Debt service funds 1,369,823 1,257,621 - - - - - - - -

Nonspendable - - 179,198 160,531 151,297 147,593 205,477 223,261 219,897 243,998 Restricted - - 7,022,919 8,020,323 8,535,571 9,060,917 13,642,430 14,194,470 13,672,194 18,873,553 Committed - - 4,546,915 4,024,188 3,130,187 2,460,530 2,617,234 1,980,130 2,036,262 2,200,742 Assigned - - 1,009,473 426,016 410,941 443,945 644,492 1,493,031 808,377 920,076 Unassigned - - - - (26,365) (64,907) (23,321) (37,306) (142,091) -

Total all other governmental funds 25,976,300$ 14,240,496$ 12,758,505$ 12,631,058$ 12,201,631$ 12,048,078$ 17,086,312$ 17,853,586$ 16,594,639$ 22,238,369$

NotesThis schedule was modified with the implementation of GASB54, effective FY11

Fiscal Year

City of SpringfieldFund Balances, Governmental Funds

Last Ten Fiscal Years(modified accrual basis of accounting)

182

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Revenue:

Taxes 26,796,400$ 28,121,897$ 28,169,922$ 28,838,941$ 30,059,119$ 31,087,716$ 33,065,500$ 31,862,305$ 33,098,818$ 33,794,986$ Licenses and permits 3,147,467 2,583,181 2,538,309 2,300,827 2,463,338 2,700,850 2,783,280 3,122,149 3,325,162 3,251,909 Intergovernmental 8,051,131 9,857,571 9,405,123 8,974,691 8,475,485 8,576,500 12,172,857 8,484,882 9,224,182 9,515,619 Charges for services 7,660,854 7,041,256 7,417,478 6,958,019 7,022,389 7,142,048 7,670,658 9,247,507 8,410,972 8,740,655 Fines & forfeitures 1,285,427 1,437,612 1,807,580 1,736,722 1,497,458 1,673,933 1,688,251 1,652,415 1,655,009 1,813,942 Use of money & property 1,159,664 452,130 263,317 170,279 191,559 141,996 109,373 170,631 276,286 427,571 Special assessments 11,684 10,856 25,625 48,934 42,569 31,651 45,618 25,265 18,989 13,082 Miscellaneous revenue 464,200 267,380 664,045 648,988 306,085 570,176 708,847 775,308 743,777 785,899

Total Revenues 48,576,827 49,771,883 50,291,399 49,677,401 50,058,002 51,924,870 58,244,384 55,340,462 56,753,195 58,343,663

Expenditures:Current Operating:

General government 6,460,455 5,536,753 5,825,159 6,083,214 6,306,579 6,042,155 6,643,279 8,240,463 8,509,994 7,901,804 Fire and life safety 10,988,771 10,651,586 11,373,445 11,514,553 11,242,700 11,515,444 11,237,818 11,848,268 12,380,622 12,894,682 Police 14,138,500 16,185,060 16,757,981 17,744,329 18,318,088 19,118,811 18,997,316 20,231,011 19,388,013 19,748,479 Library 1,354,548 1,360,464 1,375,033 1,426,083 1,457,714 1,440,438 1,610,330 1,706,475 1,848,510 1,646,799 Development and public works 12,680,663 12,085,092 10,925,370 9,283,821 9,041,272 9,427,305 9,233,725 9,063,061 9,285,822 9,036,058

Capital Projects 13,773,261 12,119,784 2,845,047 1,001,890 789,407 1,232,663 1,354,801 2,187,974 6,204,622 967,170 Debt service:

Principal 2,030,047 2,173,240 2,251,618 2,330,192 2,418,973 2,507,974 2,602,206 1,630,000 2,156,706 1,695,530 Interest 1,390,816 1,364,942 1,283,376 1,197,635 1,108,223 1,011,446 913,103 807,469 650,730 653,657

Bond issue costs - - - - - - - 131,205 - - Arbitrage - 49,406 - - - - - - - -

Total expenditures 62,817,061 61,526,327 52,637,029 50,581,717 50,682,956 52,296,236 52,592,578 55,845,926 60,425,019 54,544,179

Excess of revenues over (under) expenditures (14,240,234) (11,754,444) (2,345,630) (904,316) (624,954) (371,366) 5,651,806 (505,464) (3,671,824) 3,799,484

Other financing sources (uses):Transfers in 6,070,182 4,647,041 4,050,527 5,079,050 5,073,111 4,754,376 4,874,912 6,369,454 1,775,328 2,729,248 Transfers out (5,287,262) (4,146,202) (3,458,750) (4,120,498) (4,458,815) (4,409,317) (4,506,705) (5,801,301) (1,459,296) 1,229,455 Issuance of debt 1,800,000 - - - - - - 16,994,808 2,000,000 (1,166,455) Payment to refunded bond escrow agent - - - - - - - (16,863,603) - -

Total other financing sources (uses) 2,582,920 500,839 591,777 958,552 614,296 345,059 368,207 699,358 2,316,032 2,792,248

Net changes in fund balances (11,657,314)$ (11,253,605)$ (1,753,853)$ 54,236$ (10,658)$ (26,307)$ 6,020,013$ 193,894$ (1,355,792)$ 6,591,732$

Debt services as a percentage of non-capital expenditures * 6.96% 7.14% 7.03% 7.09% 7.05% 6.83% 6.84% 4.59% 5.21% 4.89%

Notes:*

buildings and improvements, machinery and equipment, and infrastructure incurred during the year.

(modified accrual basis of accounting)

Debt service represents principal and interest incurred during the year. Noncapital expenditures do not include capital outlay for land

Fiscal Year

City of SpringfieldChanges in Fund Balances, Governmental Funds

Last ten fiscal years

183

184

Revenue Capacity Information

185

186

Fiscal year ended June 30,

Residential Property *

Commercial Property *

Industrial Property *

Less: Tax-Exempt

Property *Total Taxable

Assessed Value

Total Direct Tax

RateEstimated Actual

Taxable Value

Assessed Value as a Percentage of Actual Value

2009 - - - - 3,502,295,304$ 7.19 7,205,559,254$ 48.61%

2010 - - - - 3,726,631,985 7.13 7,309,497,628 50.98%

2011 - - - - 3,747,745,557 7.06 6,750,427,991 55.52%

2012 - - - - 3,883,712,564 6.99 6,716,253,056 57.83%

2013 - - - - 3,998,513,269 6.94 6,399,350,681 62.48%

2014 - - - - 4,043,528,204 7.15 6,450,348,959 62.69%

2015 - - - - 4,253,901,084 7.03 6,782,631,808 62.72%

2016 - - - - 4,339,850,283 6.78 6,939,893,310 62.53%

2017 - - - - 4,471,924,355 6.79 7,145,332,593 62.59%

2018 - - - - 4,624,303,479 6.68 7,841,457,283 58.97%

Source: Lane County Department of Assessment and Taxation* Breakdown of assessed value into categories is not available


ASSESSED VALUE AND ACTUAL VALUE OF TAXABLE PROPERTY

Last Ten Fiscal Years

187

Fiscal Year

Basic Rate

General Obligation

Debt Service

Police Operating

Levy

Fire Operating

Levy Total Direct

School District No. 19

Lane County

Lane Community

College

Lane County I.E.D.

(E.S.D.)

Willamalane Park District

Rainbow Water

District

Springfield Economic

Development Agency

2009 4.70$ 1.00$ 1.09$ 0.40$ 7.19$ 5.60$ 1.39$ 0.86$ 0.22$ 2.13$ 3.67$ 0.11$ 2010 4.70 0.94 1.09 0.40 7.13 5.59 1.38 0.85 0.22 1.99 - 0.11 2011 4.71 0.86 1.09 0.40 7.06 5.60 1.38 0.85 0.22 1.99 - 0.09 2012 4.71 0.84 1.09 0.36 6.99 5.63 1.38 0.87 0.22 1.99 - 0.09 2013 4.68 0.82 1.09 0.36 6.94 5.63 1.37 0.85 0.22 1.98 - 0.15 2014 4.67 0.84 1.28 0.36 7.15 5.61 1.91 0.85 0.22 2.42 - 0.18 2015 4.65 0.74 1.28 0.36 7.03 5.61 1.91 0.85 0.22 2.33 - 0.22 2016 4.65 0.49 1.28 0.36 6.78 5.79 1.80 0.81 0.22 2.30 - 0.21 2017 4.65 0.50 1.28 0.36 6.79 5.88 1.65 0.83 0.22 2.31 - 0.21 2018 4.64 0.40 1.28 0.36 6.68 5.84 1.64 0.83 0.22 2.28 - 0.24

Source: Lane County Department of Assessment & Taxation

Overlapping RatesCity Direct Rates


PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS


188

Percentage PercentageTaxable of Total City Taxable of Total CityAssessed Taxable Assessed Taxable

Taxpayer Value Rank Assessed Value Value Rank Assessed Value

IP Eat Three LLC (Weyerhauser) 307,230,254$ 1 6.64% 180,825,022$ 1 4.85%PeaceHealth 473,085,851 2 10.23% 244,297,946 4 6.56%Gateway Mall Partners 75,125,501 3 1.62% 56,193,275 3 1.51%McKenzie Willamette 63,108,805 4 1.36% 20,827,176 8 0.56%Pacificsource Properties LLC 42,839,994 5 0.93% - -Rosboro LLC 37,849,980 6 0.82% 26,102,893 5 0.70%Borden Chemical Inc 29,941,115 7 0.65% - -HSRE NW Spec Clinics Mob LLC 29,542,738 8 0.64% - -United States Bakery 29,386,258 9 0.64% - -RC Springfield 2007 LLC 27,042,740 10 0.58% - -Symantec Corporation - - 76,191,959 2 2.04%Kingsford Manufacturing - - 24,856,903 6 0.67%Arclin USA Inc - - 21,071,403 9 0.57%Qwest Corp - - 21,007,000 10 0.56%Shorewood Packaging Corp - - 21,710,590 7 0.58%

Total 1,115,153,236$ 24.12% 693,084,167$ 18.60%

Source: Lane County Department of Assessment and Taxation


PRINCIPAL PROPERTY TAX PAYERS

Current Year and Nine Years Ago

2018 2009

189

AmountPercentage

of Levy AmountPercentage

of Levy

2009 25,639,015$ 24,092,260$ 94.0% 1,535,633$ 25,627,893$ 99.96%2010 27,170,891 25,473,655 93.8% 1,578,792 27,052,447 99.56%2011 26,956,427 25,339,490 94.0% 1,493,287 26,832,777 99.54%2012 27,667,002 26,127,844 94.4% 1,411,491 27,539,335 99.54%2013 28,646,245 26,967,621 94.1% 1,528,148 28,495,769 99.47%2014 29,539,586 27,866,138 94.3% 1,508,620 29,374,758 99.44%2015 31,427,683 29,665,353 94.4% 1,544,561 31,209,914 99.31%2016 30,360,092 28,616,502 94.3% 1,503,897 30,120,399 99.21%2017 31,525,757 29,852,562 94.7% 1,304,237 31,156,799 98.83%2018 32,210,580 30,617,910 95.1% 1,029,269 31,647,179 98.25%

Sources: Lane County Department of Assessments andTaxation; Annual Financial Reports


PROPERTY TAX LEVIES AND COLLECTIONS


Collected within the Fiscal Year of the Levy

Total Collections and Adjustments to Date

Collections & Adjustments

Fiscal Year

Ended June 30,

Taxes Levied for the Fiscal

Year

190

Debt Capacity Information

191

192

Fiscal Year

General Obligation

Bonds Capital Leases Notes PayableContracts Payable

Revenue Bonds Notes Payable

Total Primary Government

Percentage of Personal

Income Per Capita

2009 31,621,602$ 46,305$ 2,129,202$ 210,000$ 24,348,478$ 7,513,982$ 65,869,569$ 0.57% 1,134

2010 29,464,188 1,382,311 1,920,962 210,000 23,463,735 6,697,965 63,139,161 0.54% 1,078

2011 27,217,526 1,108,535 1,699,344 210,000 32,916,000 5,834,566 68,985,971 0.56% 1,161

2012 25,130,137 1,114,360 1,469,152 210,000 31,445,204 5,068,098 64,436,951 0.50% 1,079

2013 22,964,771 1,756,347 1,230,179 210,000 29,929,407 4,404,011 60,494,715 0.46% 1,008

2014 20,597,007 1,227,516 977,206 210,000 28,363,611 3,695,017 55,070,357 0.41% 917

2015 18,400,955 676,209 715,000 210,000 26,752,681 3,011,742 49,766,587 0.34% 828

2016 17,194,064 535,062 520,000 210,000 25,318,704 2,198,125 45,975,955 0.30% 764

2017 15,717,891 789,049 1,873,246 210,000 23,123,478 1,494,105 43,207,769 0.27% 715

2018 13,992,095 440,990 4,296,965 210,000 20,426,489 739,418 40,105,957 * 661

Source: Annual Financial Reports

* not yet available


RATIO OF OUTSTANDING DEBT, BY TYPE


Business-Type ActivitiesGovernmental Activities

193

Fiscal Year

General Obligation Bonds

Percentage of Actual Taxable

Value of Property Per Capita

2009 31,621,602$ 0.90% 544$

2010 29,464,188 0.79% 503

2011 27,217,526 0.73% 458

2012 25,130,137 0.65% 421

2013 22,964,771 0.57% 383

2014 20,597,007 0.51% 343

2015 18,400,955 0.43% 306

2016 17,194,064 0.40% 286

2017 15,717,891 0.35% 260

2018 13,992,095 0.30% 230


RATIO OF GENERAL BONDED DEBT OUTSTANDING


194

Governmental UnitDebt

Outstanding

City of Springfield - general obligation bonds 14,918,847$ 100.00% 14,918,847$ City of Springfield - notes payable 4,296,965 100.00% 4,296,965 City of Springfield - contracts payable 210,000 100.00% 210,000 City of Springfield - capital leases 440,990 100.00% 440,990

Total Direct debt 19,866,802$ 19,866,802

Overlapping Debt

Lane Community College 110,785,000 14.70% 16,288,497

Lane County 75,808,651 14.91% 11,306,557

School District 19 165,438,563 74.85% 123,830,268

School District 4J 297,551,422 5.08% 15,113,232

Lane Education Service District 6,485,000 14.95% 969,592

Willamalane Park & Recreation District 17,144,543 93.96% 16,109,716

Total overlapping debt 183,617,862

Total direct and overlapping debt 203,484,664$

Notes:a. Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. The State of Oregon, Debt Management Division, provides overlapping debt data based on real market valuation of properties for each jurisdiction.

b. Total direct debt and overlapping debt is total direct debt plus gross overlapping debt.


COMPUTATION OF DIRECT AND OVERLAPPING DEBT

June 30, 2018

Percentage applicable to

the CityCity's share of

overlapping debt

195

June 30, 2018

Real market value 7,841,457,283$

Debt limit 3% of real market value 235,243,718$

Amount of debt applicable to debt limit: 13,075,000

Total debt margin 222,168,718$

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Debt Limit 216,166,778$ 219,284,929$ 202,512,840$ 201,487,592$ 191,980,520$ 193,510,469$ 203,478,954$ 208,196,799$ 214,359,978$ 235,243,718$

Total net debt applicable to limit 31,352,605 29,210,296 27,242,807 25,845,000 23,665,000 21,410,000 19,070,000 15,975,000 14,465,000 13,075,000

Legal debt margin 184,814,173$ 190,074,633$ 175,270,033$ 175,642,592$ 168,315,520$ 172,100,469$ 184,408,954$ 192,221,799$ 199,894,978$ 222,168,718$

Total net debt applicable to the limit 14.50% 13.32% 13.45% 12.83% 12.33% 11.06% 9.37% 7.67% 6.75% 5.56%as a percentage of debt limit


LEGAL DEBT MARGIN INFORMATION

LAST TEN FISCAL YEARS

Fiscal Year

196

Fiscal Year System Revenues

Less: Operating Expenses

Net Available Revenue Principal Interest Coverage

2009 10,548,809$ 6,866,205$ 3,682,604$ 190,000$ 48,263$ 15.46

2010 11,893,479 6,947,301 4,946,178 860,000 1,094,244 2.53

2011 13,149,688 7,299,130 5,850,558 1,025,000 1,088,793 2.77

2012 13,275,335 7,010,679 6,264,656 1,420,000 1,231,306 2.36

2013 13,602,039 7,715,412 5,886,627 1,465,000 1,188,956 2.22

2014 14,102,581 7,954,941 6,147,640 1,515,000 1,144,050 2.31

2015 14,819,959 7,270,726 7,549,233 1,560,000 1,097,325 2.84

2016 15,814,960 9,925,186 5,889,774 1,380,000 1,039,531 2.43

2017 17,544,930 8,584,216 8,960,714 1,425,000 988,281 3.71

2018 16,755,001 9,430,586 7,324,415 1,755,000 656,409 3.04

System revenues include user fees, system development charges and miscellaneous revenue.Operating expenses do not include depreciation or interest expense.

City of Springfield

Pledged-Revenue Coverage


Debt Service

Local Sewer Revenue Bonds

197

198

Demographic and Economic Information

199

200

Personal PerIncome Capita

(thousands Personal School UnemploymentYear Population of dollars) Income Enrollment Rate

2009 58,085 11,572,848$ 32,985$ 10,526 12.7%2010 58,575 11,669,824 33,160 10,221 11.0%2011 59,425 12,235,553 34,614 10,204 9.9%2012 59,695 12,784,129 36,062 10,600 8.9%2013 59,990 13,047,961 36,630 11,033 8.0%2014 60,065 13,392,647 37,374 10,969 6.9%2015 60,135 14,597,955 40,259 11,069 5.9%2016 60,140 15,160,278 41,027 10,881 5.3%2017 60,421 16,275,200 43,430 10,600 4.6%2018 60,865 * * 10,600 3.8%

Sources: Population information provided by the Population Research Center, Portland State University.Personal income and Per Capita income provided by Bureau of Economic Analysis and represents the entire Eugene-Springfield Metropolitan areaSchool enrollment data provided by Springfield School District No. 19.Unemployment data provided by Bureau of Labor Statistics, United States Department of Labor and represents the entire Eugene-Springfield Metropolitan areaUnemployment rate information is an adjusted yearly average. School enrollment is based on the census at the end of the school year.

* Not yet available


Demographic and Economic Statistics

Last Ten Calendar Years

201

PercentageEstimated average of Total City

Employer** Employees Rank EmploymentPeace Health Oregon Region 3,500 1 12.45%Springfield School District #19 1,380 2 4.91%Top 3 Technology employers 1,200 3 4.27%McKenzie Willamette Hospital 940 4 3.34%Top 3 Wood product employers 780 5 2.77%Top 3 Food and beverage employers 410 6 1.46%City of Springfield 400 7 1.42%Willamalane 360 8 1.28%State Government 310 9 1.10%Federal Government 207 10 0.74%

Total 9,487 33.74%

PercentageEstimated average of Total City

Employer Employees Rank EmploymentPeace Health Oregon Region 3,400 1 12.09%Springfield School District #19 1,600 2 5.69%Symantec 904 3 3.22%McKenzie Willamette Hospital 780 4 2.77%Wal-Mart 450 5 1.60%City of Springfield 445 6 1.58%Peace Health Medical Labs 374 7 1.33%Lane Transit District 329 8 1.17%Willamalane Park and Recreational District 312 9 1.11%U.S. Postal Service 310 10 1.10%

Total 8,904 31.67%

Source: City Economic Development Division** Due to confidentiality - the department of labor no longer discloses employee numbers for private companies.


Principal Employers

Current Year and Nine Years Ago

2018

2009

202

Operating Information

203

204

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Function/Program

General governmentCity management 8.00 8.00 8.00 7.00 7.00 7.00 7.50 7.50 7.50 7.00Finance 11.30 10.30 10.30 9.80 9.50 9.50 9.50 11.70 11.70 9.70Human resources 7.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 8.00 8.00Information technology 10.00 10.00 10.00 10.00 10.00 10.00 10.00 15.00 15.00 14.80Legal/Judicial services 8.55 8.55 8.55 8.85 8.84 8.84 8.84 8.84 8.84 8.84

Development services 0.00 0.00 0.00 0.00 0.00 0.00Police

Officers 70.00 66.00 69.00 69.16 68.16 68.16 70.00 70.00 69.00 69.00Civilians 41.00 57.00 57.00 55.00 54.83 54.83 53.00 53.00 55.00 54.00

Fire and life safetyFirefighters and officers 90.25 91.00 88.00 88.00 87.00 86.00 86.00 86.00 86.00 86.00Civilians 21.00 17.00 18.00 15.00 14.00 14.00 13.00 13.00 11.50 9.75

Development and public worksEngineers 19.00 20.00 15.00 15.00 15.00 13.00 12.00 13.00 12.00 12.00Other 149.75 135.75 134.25 125.75 115.56 116.75 118.00 110.00 111.00 114.38

Library 13.60 13.20 13.40 12.40 12.60 12.60 13.10 13.50 13.50 14.13

Total 449.45 442.80 437.50 421.96 408.49 406.68 406.94 407.54 409.04 407.60

Source: City Budget Office* Based on published Budgeted FTE as of July 1, preceding year


Full-time Equivalent City Government Employees by Function/Program


205


PoliceCriminal arrests (charges) 7,054 7,107 7,527 7,148 8,577 9,221 7,672 8,506 9,348 9,367Parking violations 395 354 ** 237 185 360 209 244 607 558Traffic violations 9,964 9,423 10,299 10,122 10,648 7,517 7,775 8,219 8,087 7,997

Fire and life safetyNumber of fire stations 5 5 5 5 5 5 5 5 5 5Emergency responses 18,413 17,382 19,096 19,398 20,836 23,206 25,504 25,927 26,357 26,623Fires extinguished 238 165 180 206 248 275 287 194 300 252Inspections 3,329 2,103 1,670 2,214 1,047 1,641 2,123 4,474 1,642 191

Library Number of public computer log-ins 100,867 60,335 59,994 46,797 64,065 70,756 56,666 53,733 25,683 21,958Total volumes loaned 326,235 344,809 344,586 354,120 354,538 354,503 365,497 364,823 355,848 365,763

Development and public worksCrack sealing 41 12 9 3 40 28 11 12 0.14 2Potholes repaired 722 1,569 1,062 1,364 1,124 1,047 775 ** ** 1,103Storm lines high velocity cleaning 32,584 7,810 9,452 3,835 1,909 1,811 2,200 1,500 2,000 4,661Sanitary lines high velocity cleaning 932,839 965,853 653,641 652,069 587,954 363,748 426,466 601,920 786,000 646,635Number of building permits * 512 491 400 428 382 433 466 224 427 1,541Building valuation (in thousands) $ 65,192 $ 48,150 $ 38,067 $ 40,698 $ 44,388 $ 44,621 $ 51,818 $ 77,150 91,011$ 71,631$

Sources: Various city departments

* New constructions permits** Data not available


Operating Indicators by Function/Program


206


PoliceStations 1 1 1 1 1 1 1 1 1 1Patrol units 20 20 20 20 20 20 20 20 24 24

Fire stations 5 5 5 5 5 5 5 5 5 5Public works

Streets (lane miles) 401 412 420 423 423 423 444 442 443 447Street lights 4,117 4,160 4,208 4,350 4,530 4,300 4,362 4,338 4,227 4,431Traffic signals 68 69 68 73 83 68 83 93 78 72

WaterFire hydrants 1,552 1,552 1,552 1,559 1,581 1,585 1,600 1,518 1,487 1,499

Sources: Various city departments


Capital Asset Statistics by Function/Program


207

208

Compliance Section

209

210

Audit Comments

211

212

475 Cottage Street NE, Suite 200, Salem, Oregon 97301

(503) 581-7788

INDEPENDENT AUDITOR’S REPORT REQUIRED BY OREGON STATE REGULATIONS

To the Honorable Mayor, Members of the City Council and the City Manager City of Springfield 225 5th Street Springfield, Oregon 97477 We have audited, in accordance with auditing standards generally accepted in the United States of America, the basic financial statements of the City of Springfield, Oregon as of and for the year ended June 30, 2018, and have issued our report thereon dated January 15, 2019. Compliance and Order Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules 162-10-000 through 162-10-320 of the Minimum Standards for Audits of Oregon Municipal Corporations, noncompliance with which could have a direct and material effect on the determination of financial statements amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. We performed procedures to the extent we considered necessary to address the required comments and disclosures which included, but were not limited to the following: Deposit of public funds with financial institutions (ORS Chapter 295). Indebtedness limitations, restrictions and repayment. Budgets legally required (ORS Chapter 294). Insurance and fidelity bonds in force or required by law. Programs funded from outside sources. Highway revenues used for public highways, roads, and streets. Authorized investment of surplus funds (ORS Chapter 294). Public contracts and purchasing (ORS Chapters 279A, 279B, 279C). Accountability for collecting or receiving money by elected officials - no money was collected

or received by elected officials. In connection with our testing nothing came to our attention that caused us to believe the City was not in substantial compliance with certain provisions of laws, regulations, contracts, and grants, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules 162-10-000 through 162-10-320 of the Minimum Standards for Audits of Oregon Municipal.

213

Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. Restriction on Use This report is intended solely for the information and use of the Honorable Mayor, City Council and management of the City of Springfield, Oregon and the Oregon Secretary of State and is not intended to be and should not be used by anyone other than these parties. GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS By: Ryan T. Pasquarella, A Shareholder January 15, 2019

214

Documents

Comprehensive Annual Financial Report Fiscal Year Ended ......Subsequently, in November 2017, Springfield voters re-authorized that levy for another five years at an increased rate